The development of the financial industry, financial software, and digital services is now encouraged by new realities. Several people have utilized at least one FinTech platform since the pandemic, and financial software development is increasing. The global FinTech market will grow by $31.5 billion by 2026, almost quadrupling its current size. Comparing 2021 to 2020, investments in fintech increased by 144 percent. The technologies that underpin financial products and services are essential to the development of the FinTech industry. Below are the top technologies and trends shaping the FinTech industry this year.
The Open API, also known as Open Banking, allows third parties to access bank client data with the owner’s permission. Due to open APIs, the bank shares the financial data of its customers with retailers, insurance companies, and other firms. Before implementing insurance, granting a loan, or allowing payment by installments, they must confirm the client’s solvency. Open Banking disrupts the market by enabling users to pay for products & services online easily and quickly and receive a loan instantly.
FinTech firms are using more-and-more connected devices to acquire business-friendly customer insights and improve decision-making. The wearables industry will expand from $48.89 billion in 2021 to $118.16 billion in 2028, thanks to the rising interest in IoT. Connected wearables are beneficial for various FinTech functions, like replacing conventional point-of-sale (POS) systems with mobile POS systems and customer behavior analysis by financial institutions. While connected speakers and smart refrigerators place orders and handle payments on their own, smartphones, smartwatches, and bracelets can be used in place of a bank card for payment.
RegTech is a platform that assists businesses in adhering to intricate industry laws. Regulation-related technology identifies problems that don’t follow the rules and fix them, so they work with the system. Specialized software automates monotonous procedures, keeps an eye on data security, and alerts users and bank workers to fraud. The value of the compliance software solution expects to reach $55.28 billion by 2025, given the importance of RegTech.
FinTech is transforming into a priority industry for biometric authentication technology since 93 percent of customers think protecting financial accounts is the most crucial concern. Researchers predict that the global biometrics market will increase from $36.6 billion in 2020 to $68.6 billion in 2025.
Smart algorithms enhance several processes of banks, credit, and insurance companies. AI detects abnormal behavior and notifies the client and the bank of the threat if a fraudster gains access to the platform. Intelligent virtual assistants are developed based on AI. These chatbots are available round-the-clock to assist consumers in resolving issues. The system studies user behavior and provides clients with tailored financial advice on more benevolent terms.
Banks are embracing blockchain more actively than insurance and credit companies in the financial sector. Blockchain sets protocols within the bank and assists in maintaining an automated record of data. Since every transaction is documented and verifiable, it safeguards the bank against fraud. As a result, it is simple to spot a hacker attempting to commit a financial crime. Since all network nodes review financial transactions, it shields users from transactional problems. Blockchain enables faster and lower-commission international payments and transfers.
Financial companies with the cloud can access scalable storage and powerful processing capacity at affordable pricing. The digitalization of the FinTech sector and Open Banking are both supported by the cloud. The trends to watch out for are cloud microservices architecture, edge cloud, a cloud ecosystem encompassing storage and computing resources, cloud containers as a service (CaaS), and integration of AI into the cloud. The growth of financial cloud services expects to exceed 24 percent per year.
Robotic Process Automation
A robot performs repetitive activities like entering data, producing reports, managing financial information, determining the solvency of the bank’s client, handling insurance claims, managing customer requests & complaints, and registering consumers. Robotic Process Automation, which foresees a 400 percent revenue increase for the FinTech sector by 2023, is the secret to its success.