The Fintech industry in growing in terms of revenue and investments. In 2017, fintech investments increased to $12.85 billion. Running away from long queues, mind-boggling bureaucracy and the tortoise-like pace of different financial services, more and more consumers today are managing their money online, which means they are moving to the fintech world. Here’s what fintech consumers can look forward to in 2018 and beyond.
A rapidly growing area that has a lot of people excited, Financial Technology or fintech is being increasingly adopted today by people ranging from entrepreneurs and CEOs of companies to the average people on the street. Why this growing interest in Fintech? Because technologies enabling fintech have the potential to change the way we carry out transactions and make a lot of people rich in the process.
However, new technologies are being released in the finance industry at such a rapid pace that it can be difficult to keep up with them. Since most people are strapped involved in financial transactions are strapped for time, we decided to research on their behalf to find the trends with the potential to change fintech in 2018 and beyond. Following is what consumers and businesses in the fintech industry can look forward to in 2018 and beyond.
Increased Interest in Artificial Intelligence (AI)
Expect the use of advanced cognitive AI solutions to decrease costs and overheads to get popular in 2018 and beyond. For fintech companies looking to gain an edge over competitors, investment in artificial intelligence (AI) will be crucial. So, which areas of fintech is AI likely to be used for? AI will be at the center stage of customer analytics, fraud detection, and anti-money laundering solutions. However, how productive AI will be in those areas is anyone’s guess.
Diversification of Cryptocurrencies
In the past few years, cryptocurrencies have been big business, with Bitcoin alone enjoying exponential growth. As a result, many cryptocurrencies have been launched through various initial coin offerings (ICOs), which means that consumers as well as financial professionals have more options than previously when it comes to the cryptocurrency to use. However, this gives birth to fragmentation, as well to fraudsters who launch ‘fake’ cryptocurrencies in an attempt to cash in on naive and unsuspecting investors. The cryptocurrency market is nowhere near maturity, but it is a market to keep a close eye on.
Diversity in Regulation
Regulators are increasingly searching for new ways to become part of the blockchain revolution. As such, regulatory sandboxes which are the regulatory guidelines for fintech, have started to gain popularity. This year in March, Arizona became the first U.S state to launch regulatory sandbox for fintech. As a result, regulators are still taking more of a ‘Bystander approach’, allowing fintech innovators more freedom to act.
The challenge of finding the perfect balance between innovation, risks, and controls is still very much relevant. However, if cards are played right, the Fintech industry will become more powerful and secure due to the growing number of regulatory bodies, which will boost consumer confidence while further solidifying and increasing fintech’s popularity.
The Wider Application of the Blockchain Technology
You cannot discuss cryptocurrencies without mentioning blockchain; it’s like committing a cardinal sin because the technology that underpins cryptocurrency and allows it to work is blockchain. Blockchain is essentially a decentralized ledger that’s distributed across many different users. What this means is that there is no single entity holding the keys to the data and that changing the ledger is not possible once data has been recorded.
Currently, the technology has wide application in the fintech world including in the field of healthcare, where it could be used to store health records while making them accessible to different providers. However, blockchain has plenty of potential to further disrupt the finance market. For example, blockchain could how houses are bought and sold because each property could have its own individual blockchain record, and banks would need to factor this information in when deciding whether to offer someone a loan or a mortgage.
The Rise of Mobile Banking and Payments
Mobile is already driving fintech as more and more people today are keeping fintech mobile apps among their favorites. What’s the reason behind it? The experts say that the simplicity and convenience of fintech mobile apps act as a magnet for consumers and are shaping the industry to become customer-centric. Perhaps this is the reason mobile is one of the leading trends in fintech in 208 and that mobile banking and payments are expected to increase to $92 billion in 2019.
A technology changing the way we make payments is near-field-communication (NFC). NFC is being used in many countries to enable contactless payments via bank cards held up to a reader. Additionally, it’s been built into most modern smartphones and the technology can even be surgically implanted into a person to allow them to pay for their coffees or rides home with literally a wave of their hand.
While there’s some time before we see people walking around with these implants, NFC will be used in many more ways than it is today as it moves towards full maturity, especially as more and more wearable devices enter the market.
Increase in Financial Startups, Solutions and ICOs
Fintech is everywhere today, and big-named corporations see this ubiquitousness of fintech as an opportunity to pour more money into newly emerging, young fintech companies, many of which prefer ICOs as their funding channel rather than going for traditional forms of funding. In short, established financial organizations have started assuming the role of venture capitalists and are pushing the smaller fintech companies to achieve success in their field.
To know more current and future trends in fintech, get in touch with us today!
by Bobby J Davidson
We love our company and we love what we do. Check out the ‘Why Percento‘ page to learn more: Love of Technology and Business! As the President of Percento Technologies International, I provide day-to-day leadership to the company’s senior management and I am personally involved in the strategy, business development and sales activities of the firm.
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