Fintech is a homogeneous amalgamation of the best out of finance and technology industries and set up as a whole new thing in the market. New emerging technologies and flexibility like Offshore Software Development are empowering the emergence of industries like Fintech. This industry is growing rapidly trying to meet the increasing consumer demands of the finance and banking sector. Innovations like lending applications, cryptocurrency exchanges, savings apps, investment platforms, and money exchange tools are all part of the Fintech trail. Furthermore, there are lots of other brilliant prospects awaiting to revolutionize the way we look at the finance and banking sector today. Let us have a close look at the trends influencing the Fintech industry.
More and more people are being digitally active and using fintech globally. Especially, in the countries like China and India, the percentage of consumers adopting fintech is above 85%. However, like every other industrial sector, it also experienced some turbulence. But now it is back on track. And the following are some trends you need to watch out for in 2023…
Vising banks with an application in hand to get a request processed is an old notion now. This is the era of home delivery and digital services. People want everything at their doorstep. Going to banks and standing in long queues is not something that anybody enjoys. Then there is the option for banks with no physical presence. You get all the amazing features like global payments, P2P transfers, and contactless MasterCard with zero transaction fees at the click of a button. You can also buy and exchange Bitcoin, Ethereum, and other cryptocurrencies with the help of these virtual banking platforms. There are certain Digital-Only banks looking out for their customer base. These include Revolut, Moven, Monese, HelloBank, FirstDirect, and Digibank. Moreover, there are a lot of Offshore Software Development companies working to build more such apps with a reliable API structure.
The idea of integrating financial tools or services within the offerings of nonfinancial institutions is termed embedded finance. It includes all the necessary financial services from banking, credit, and investment to payment processing and insurance. Embedded finance is expected to be a huge revolutionizing factor in fintech in 2023. In the last five years, the searches for this term have accelerated by 488%. This gives the idea that people are looking forward to embedded finance as a suitable option. For embedded financial services distribution, trust, and improved user experience will be the success formula. According to some data, the search for the term “Banking as a service” has also increased by 176% globally. Banking as a service allows non-banking companies to access the banking service of a financial institution using APIs. This enables businesses to embed financial services into their own products and they do not need to build these services from scratch.
Blockchain certainly has the potential to change the face of financial services. Though it is not that new to the market. Blockchain has been around for a while now. Fast service, low processing fees, and global reach are the features to boost the popularity of blockchain technology in financial services. According to a PwC 2020 report, blockchain can potentially boost the global economy to $1.76 trillion during the next decade. The top two nations benefitting from the technology will be China ($440bn) and the US ($407bn). Blockchain is not controlled by a single entity, it is rather decentralized. Therefore, it is a more secure way of storing data decreasing the risk of identity and data theft to a minimum.
With the rate at which revenues of the banks are increasing, there is no wonder if you see them implementing AI solutions. For instance, there are banks that generate revenue more than the total income of nations. Manual operation is not able to handle this with high efficiency. Implementing AI-based solutions can effectively help with operating costs and efficiency. It is projected that AI can reduce the operating cost of banks by up to 22% by 2030. However, this is not as easy as it might sound. Professionals with AI knowledge and the ability to deal with unstructured data are required to carry out the operations we are talking about. Therefore, it won’t be easy to find that type of workforce easily.
Mobile payments, contactless payments, mobile wallets, and smart speaker systems are among the multiple components of innovation in payment methods. Then there are identity verification technologies, AI, and machine learning for security purposes. Offshore Software Development firms and other development entities are continuously working to devise future-ready payment solutions. By the end of 2025, the global eCommerce transaction value is expected to go over $5.4 trillion. So, you will see it grow exponentially in the next 2-3 years.
Finance and technology are the two essential sectors of a modern economy. Fintech includes the best of both worlds. Software Development Companies in UK and the rest of the world as well are making efforts to integrate modern technology with financial services seamlessly. The end result of this is not only beneficial for the concerned organizations. But the users of these services would also enjoy the benefits.
Praveen is a seasoned IT Solutions Leader and Director at RSK Business Solutions, a technology-driven IT Consulting Company that specializes in Bespoke Software Development, Agile Consulting, Mobile App Development, Smart Sourcing, and much more. For the last 17 years, he has been delivering quality custom IT solutions that help businesses achieve their goals.