Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Fintech Trends to Watch for This Year
Guest Post | Apr 23, 2021
The COVID-19 pandemic brought about digital transformations in many ways. Remote work was no longer a theory—it was a necessity. Telemedicine wasn’t an experiment—it became the only way to get standard medical care.
Fintech also exploded because financial institutions were closed for in-person services, and our entire lives moved online.
Of course, fintech was already on its way to being one of the biggest disruptors in both tech and finance, but that was likely sped up by the pandemic. From new emerging data protection strategies for fintech to reaching broader audiences, there has been a lot of evolution in the industry.
With that in mind, the following are some of the fintech trends to watch this year and into the next.
Adoption by Older People
One of the biggest shifts in fintech is that it’s no longer just seen as something for the Millennial and younger demographic. The closure of brick-and-mortar banks and financial institutions, as well as reduced hours and restrictions on things like going into lobbies, mean that even people less comfortable with technology had to shift to online options.
There has been a huge increase in mobile banking registrations, and more older people are starting to get comfortable with things like online bill pay.
With that has also come a shift in how older people view online banking.
Non-traditional financial and banking services and platforms are starting to be seen as more credible and legitimate as a whole.
Blockchain Growth
Blockchain technology is allowing for peer-to-peer transactions without the need for a middle-man to transfer assets, and that in and of itself is becoming a big disruptor in the financial industry.
Asset transfers don’t just mean money. It means things like titles and mortgages.
Transactions that might have taken days or weeks before can now be done efficiently within minutes.
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There’s not just a speed-up in the timing of transactions that’s available with blockchain. There’s also more transparency. You can go into the blockchain ledger and ensure there aren’t any changes to the record.
A report from Business Insider Intelligence found that 48% of bank representatives think blockchain technology will be the most impactful trend in the industry this year and beyond.
Along with the role of blockchain will also be more of an influence coming from cryptocurrency. Facebook is even rumored to be rolling out its own cryptocurrency and P2P platform dubbed the Libra project.
Artificial Intelligence
There’s hardly an industry not being affected by artificial intelligence, and banking and fintech are no exception.
Banks are estimating they’ll reduce their operational expenses by 22% thanks to artificial intelligence by 2030.
Banks might end up being able to save as much as $1 trillion with the use of AI, or at least that’s the hope based on current projections.
Some of the specific ways AI and machine learning might start playing a more pivotal role in fintech include increasingly customized chatbots that can take care of complex tasks for customers, as well as the availability of digital assistance that can provide personalized financial advice to users, including highlighting specific investment and saving opportunities.
Security and Regulation
Fintech providers are going to have to increasingly work to keep up with security and regulation. Security is one of customer’s number one concerns, and with this in mind, not only do extensive security precautions need to be taken, but you’ll see fintech and digital banking companies using this as part of their marketing.
There is talk about more regulation in a variety of areas that could impact fintech too. For example, trading platform Robinhood faced legislative scrutiny recently after the buzzy GameStock situation when Redditors came together to boost the stock. There’s also talk about more regulation regarding cryptocurrency, and fintech companies, in general, are likely to face more stringent standards.
There’s also something called RegTech, which utilizes AI to do risk assessments and provide big data insights. The more fintech companies are collecting data, the more oversight they face, and RegTech may help alleviate some of the compliance-based burdens these companies are facing.
Inclusiveness
Finally, fintech companies are going to likely be moving into the world of inclusion and focusing on bringing diverse customers into their services. This is a top priority for companies in all industries, but you’ll see a lot of products, services, and marketing targeted directly at larger and more diverse audiences.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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