Top Technology Trends Redefining the Future of the Fintech Industry
So what does the future hold for the fintech industries? Let’s take a look at some of the top technology trends that will change the future of the fintech industry!
1. Decentralized Finance or Defi
Decentralized Finance is an upcoming financial technology that facilitates and ensures the production of financial products and services on public blockchains. A significant feature of Defi is that it eliminates the pre-established power that banks and other financial intermediaries exercise over money, financial products, and financial services.
It democratizes the system by allowing people to secure their money and resources in a trusted digital wallet, transfer funds within seconds, and there is no third-party interference. The development of the Defi application can be supported by stablecoins, software, and hardware. But the success of Defi solely depends upon the policymakers’ acceptance of its seamless inclusion in the fintech space.
Blockchain is an information-saving database in the world of cryptocurrencies, storing information in a digital format electronically. It preserves a secure and decentralized record of transactions, ensuring the accuracy and security of the data record without the involvement of any third party or intermediary. Blockchain technology assures a highly secure transaction, preventing financial fraud and aligning easy compliance with audits and regulatory obligations.
Blockchain Technology aids in faster and error-free payments and investments. According to reports, blockchain will have a tremendous bearing on the expansiveness of the fintech sector.
3. Voice-assisted payments
Are you someone who uses voice assistants on their smartphones? It makes your tasks a bit easier, right?
Likewise, fintech companies and start-ups are very eager to employ voice-based payments. Customers find it much more convenient to talk rather than type to receive quick responses and answers. Voice-assisted payments will boost banking transactions as customers will feel they are engaging with a real person thanks to significant leaps in natural language processing, natural language understanding, and natural language production.
4. Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) and Machine Learning (ML) revolutionized the banking sector with their ability to evaluate real-time trends and help with astute decision-making. AI & ML enabled banks to maintain and keep track of vast amounts of data and draw appropriate conclusions. The efficiency and cost-effective nature of AI & ML led to decreased loan defaults, improved customer experience, and initiation of safer transactions.
Many fintech companies are studying and assessing AI applications to help banks in fraud detection, customer care, credit service, and loan decision-making processes.
5. Digital-only banks/ Neo Banks
As the world is embracing the recurrent waves of digitalization, the dependency on physical infrastructures to run operations is tumbling.
Digital-only banks are digital platforms offering virtual banking services such as peer-to-peer transfers, international remittances, contactless MasterCard with no transaction fees and requiring no paperwork.
In a short time, the explosion of digital-only banks and neo banks is an axiomatic reality. The reasons are self-explanatory. It promotes convenience by removing time-consuming paperwork, long queues, and bank visits. The eruption will bring paradigm shifts in the fintech sector.
6. Robotic Process Automation or RPA
RPA is a software robot creating technology that mimics human movements, performing a specific set of defined tasks in digital systems and software. Through RPA, software robots can identify what's on a screen, execute operations like typing the correct keystrokes, traverse systems, locate and extract data, etc., just like humans.
By using Robotic Process Automation or RPA, fintech firms can reduce operational costs leading to workers finishing their tasks effectively and delivering seamless customer care service on a priority basis.
In a nutshell, the infiltration of these technologies in the fintech sector will most possibly rewrite the industry's history, expanding it to all corners of the country and bringing about a ‘fintech age,’ which will be the zeitgeist of the modern period.