A successful fintech application emerges from business goals that are properly matched with the appropriate technology stack. It also involves having a deep understanding of the major technology trends at your fingertips.
Below are the global innovation trends that you should keep an eye on for your financial technology project. You can learn a lot from them.
Virtual banking
Virtual banking is a global trend. It is aimed at simplifying financial transactions between users and companies, transferring them to an online format.
The growth and development of the direction in the coming years will be very fast.
By 2027, the segment of bank transfers and contactless payments will grow more intensively than the segment of payment cards.
A current trend can also be called virtual IBAN for business, which simplifies the creation and maintenance of accounts.
The most well-known products that allow payments without a physical card are Google Pay and Apple Pay. In some countries, development is moving towards QR payments, which have been implemented for a long time, for example, in Armenia by such companies as Idram and Telcell. A more global example of such products is WeChat in China.
International money transfers
In recent years, due to the complicated geopolitical situation, difficulties have arisen with cross-border transfers and international payments between some countries. Both individuals and companies are unable to make payments.
There is a trend to create alternative methods of money transfer that would not depend on the systems of other countries. Perhaps cryptocurrencies will be the basis of infrastructural solutions for alternative international settlement systems.
Artificial intelligence
Artificial intelligence in the financial technology industry is used both for communication with companies’ customers and for internal tasks. Primarily, artificial intelligence-based programs are responsible for:
- remind the user of upcoming payments;
- warn the user about the use of overdrafts;
- engage in the pricing of banking products;
- provide users with financial advice and recommendations;
- assess the creditworthiness of bank customers.
Biometric authentication
Biometric authentication of a financial product user includes passport scanning, photo verification, facial scanning, and its analysis in a video stream. All this allows companies to protect online banking users from fraudulent transactions and make contactless payments possible.
Insurtech
The use of technology in insurance is becoming essential. For example, analyzing data that has never been evaluated before – a person’s social media profile. Accounts are becoming not only the subject of analysis, but also the object of insurance – companies and services around the world are learning to work with influencers and adjust to their needs.
Another example of innovation in the insurance sector is telematics. A device is installed in the insured person’s car, thanks to which the insurance company can track driving habits and calculate an individual tariff, which allows for a more flexible approach to the insurance policy.
BNPL – Buy Now, Pay Later.
The share of BNPL in the global consumer credit market is 2%. A McKinsey survey showed that almost 30% of consumers in the world at least once financed a purchase with the help of BNPL, and 29% admitted that without installments they could not afford a large purchase.
The growth of BNPL’s services continues. When the installment system is integrated on all trading platforms, the next stage of fintech development will come.
A glimpse into the future
Fintech solutions are emerging in certain countries also because of cultural differences. In countries where there are long distances between population centers, people need solutions that allow them to avoid meeting other people, wasting time, or leaving the house in bad weather.
And in Spain or Israel, for example, you can’t transfer money from account to account day-in and day-out, not because there is no one to create such technology for. Their consumer habits are different: people like to solve all issues in person.
Within ten years, countries around the world will reach a high level of digitalization. This will be facilitated by the spread of the Internet, the emergence of new fintech startups, and changes in government regulation. The leaders will be companies that work in several areas at once and help customers maximize the closure of financial tasks in a convenient interface.
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