The financial sector has seen strong growth in recent years. Due to an
uptick in creativity and technological expansion in nearly every market
ecosystem, especially the FinTech component in the mix. But after the
tragic spread of the fatal and contagious coronavirus across the globe,
things changed. The entire industry is under pressure, and the
future of FinTech apps
has come to a halt.


What is FinTech?

FinTech is a fusion of two concepts — Finance + Technology. FinTech
explains the emerging technologies that are in the ongoing process of
evolving, updating, and automating the use and delivery of financial
services. With its assistance,
FinTech software
is available for the proper management of financial activities and
processes by both company owners and businesses.

Initially set up to offer financial services, it now encompasses a
range of financial operations, such as finance, education, wealth
management, retail, accounting, and more. Moreover, it also plays a
pivotal role in the use and creation of a modern form of money, e.g.,
cryptocurrency such as Bitcoin.



FinTech Apps Trends

Even if the COVID situation returns to usual, it seems that consumers
will have to migrate to virtual financial systems such as digital
transfers, internet banking, Robo-advisories, lending, and more. Here are
some future trends to watch out for.

1. Future of FinTech Apps: Biometric Security Systems

FinTech and social banking platforms also made banking more accessible to
all. However, it is also valid that it has posed several security issues,
as cybercrime linked to banking is rising.

It necessitates the introduction of appropriate protection procedures,
which FinTech firms must formulate. Biometric protection systems have
emerged as a reliable and foolproof security measure that raises the bar.
It gives consumers and organizations assurance that their data is safe and
secure.

The biometric industry is currently transforming as a result of big
changes. Physical touch-based biometric sensors are anticipated to
decrease. Contactless biometric solutions are expected to replace
touch-based biometric solutions in the coming years.

The COVID-19 pandemic is a big cause of this transition. People are
avoiding the use of cash and any other kind of payment that requires
contact. As a result, contactless biometric authentication solutions are
becoming more common in the aftermath of COVID-19.

2. Future of FinTech Apps: Neobanking

With conventional banking behemoths unable to keep up with
technology-first activities, Neobanks will be one of the year’s most
important developments. Today, FinTech products and services are
redefining the heart of finance, and when service offerings consolidate,
FinTech startups can begin to resemble banks in several respects. And as
India grows more technologically savvy. Neobanks are bound to become the
trend and evolve as one of the leading innovation fields. Also,
established banks are likely to take heed and spend aggressively on
technologies. But newcomers would have an advantage in creativity and
digital-first plays.

Neobanks is emerging as a competitive alternative to the conventional
bank branch model.  Here, supermarket stores are turned into mini-ATMs for
cash deposits and withdrawals.

3. Future of FinTech Apps: RPA

Robotic Process Automation (RPA) is a process automation system that uses
software robotics or robotic staff to automate processes that humans
typically do. RPA has also been introduced in the financial services
sector to minimize risks and boost overall corporate efficiencies.

Not just that, but financial companies have used RPA automated staff to
simplify a variety of back-office procedures such as compliance reviews,
consumer onboarding, account maintenance and closure, trial balancing,
credit card and mortgage collection, and several others.

The main advantage of RPA is that automated staff can complete these
activities more effectively and easily, enabling financial institution
employees to concentrate on more essential fields such as customer
support.

4. Future of FinTech Apps: Open Banking

Open banking is a game-changing technology that links FinTech and banks,
allowing data to migrate through organizations.

  • It is directly connected to PSD2 (Second Payment Services Directive).
    It requires banks to release their data in a stable, consistent
    format. Information can be exchanged more conveniently and
    electronically between approved entities.
  • It enables third-party applications to monitor consumers’ banking and
    other financial details through data sharing through APIs and
    AI.

Many market players already expect that open banking would reshape the
banking industry as we know it. And not for no cause.

According to reports, open banking raised $7.29 billion in 2018 and is
projected to grow to $43.15 billion by 2026. Financial firms require
FinTech, and FinTech requires community banks and credit unions. As a
result of this demand, transparent banking relationships will provide
consumers with a fully consolidated view of their financial accounts,
making them simpler to handle. Consequently, transparent banking goods and
services are projected to facilitate stronger financial decision making,
lower debt, and increased long-term wealth creation. It also benefiting
banking companies, FinTech employees, customers, API sector figures, and
even underserved populations.

As it encourages banks to become more transparent, it also poses specific
unanswered questions, such as data storage and security threat management.
However, raising knowledge and collaborating through organizations will
help prevent problems and provide customers with value-added
services.

5. Future of FinTech Apps: Mobile Money

In addition to
E-Banking, there are several channels by which customers can pay or be charged.
This low-cost initiative has been well-known worldwide, allowing consumers
to make money, submit the money, and pass money to a bank. E.g., Vodafone,
one of the leading telecom operators in India, has launched its M-Pesa
mobile-based money transfer technology.

One of the key factors why Mobile Money has been so common. It is so that
people no longer have to think about internet banking, credit cards,
passwords, PINs, and other similar issues. Similarly, finance sectors such
as life insurance and general insurance will leverage this program to draw
new clients and renew current policies.



Moving to the Unreached

When emerging innovations and ideas like blockchain, on-demand markets,
and others are discussed. It’s essential to concentrate on the benefits
they are going to offer to the middle class and upper crust of
society.

Fintech is expected to reach and create a difference in rural and urban
areas where financial problems are real. It is unavoidable given that,
according to a World Bank survey, about 1.7 billion citizens either need
links to or are not a member of a substantial financial system.

Since FinTech’s strengths are perfect, we should anticipate
FinTech services
trends like this to extend to these business segments.



The Next Step

Experts ask FinTech organizations and startups to take immediate
action. Thus, to place more emphasis on their cash flow and balance
sheet management to remain relevant. Research also means that there will
be a significant reduction in business and consumer spending. Thus, it
will result in less transaction-based revenue.

Therefore, the FinTech app development company should focus on serious
financial challenges waiting at their doorstep. Thus, focus on ‘new
normal’ to reduce costs and remain sustainable in this difficult
period.



The New Normal for FinTech

Previously, the ‘original model’ for FinTech means how many clients
financial companies have with them. But in today’s modern world, ‘fresh
standard’ means that consumers are anyone who can pay for goods and
services.

For Financial institutions, the ‘fresh standard’ determines main
performance indicators based on the nature of the products being
produced to the consumers. Also, the latest generation of FinTech – the
Neobanks – is poised to become a new normal. Why? That is because they
have been the strongest solution to the conventional banking model and
have greatly increased competition. Modern banks have also become a
new-age understanding of all financial services (banking services
also).

The COVID pandemic has helped the financial industry that they are
digital. Only financial service providers and do not need any physical
appearance. They come with procedures that run in a digital mode. It can
be done either through the bank’s website or through the banking
app.

Another ‘modern trend’ is a constant shift in the function of
negotiators. The days are over where customers have to use their
financial services by intermediaries (like advisors or brokers). Today,
during the pandemic, they are digitally doing their financial roles and
have generally denied intermediaries’ value. After receiving details on
the ‘new standard’ for the FinTech market. Now, the time has come to
reflect on the evidence that will enable FinTech to grow successfully
after COVID-19.



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