The adoption of AI in the financial industry was very slow before the pandemic. When the world shut down, this finally prompted financial institutions and their partners around the world to automate the rest of their banking and make it more customer focused. What does the future hold for 2022? Here are seven fintech trends to watch:
1. Digital Banking
Due to the changing consumer habits caused by the pandemic, bank closures are on the rise. Digital banking offers an improved customer experience and delivers faster and more efficient services. Statista estimates that 64.6% of US citizens will use online banking in 2021, meaning that online banking is finally becoming a transformative tool in finance. The good news is that digital banking isn’t just about getting out of paper and cashless – core technologies have made a major contribution to the shift from a traditional, centralized banking model to a more distributed, technology-driven model.
2. White Label Fintech
The next trend in fintech that you shouldn’t miss is white labeling. In short, white label products are manufactured by a provider to be rebranded before they are sold. Financial management has a lot of complications. White Label FinTech solutions allow businesses of all sizes to easily create a global payment gateway. It is a real win-win situation as it provides the distributor with a larger customer base and reduces the distributor’s initial launch costs.
3. Data collection
Data aggregators will increasingly be responsible for facilitating the way data is exchanged between financial institutions and their customers. For example, Envestnet Yodlee retrieves data from multiple sources, including investments and credit cards outside of the original financial institution. Expect fintech companies to use this transparency to provide their customers with additional services.
4. Blockchain Technology
According to Cision PR Newswire Report, the global blockchain market size is expected to increase from $3 billion in 2020 to $39.7 billion by 2025. Blockchain is undoubtedly the most important financial innovation for digital transactions because its management is distributed, which means that it cannot be controlled A specific individual, company, government or bank. Although companies are concerned about the security issues of this cutting-edge financial technology, the growing acceptance of Blockchain as a way to create a secure digital ledger cannot be ignored.
5. Robotic Process Automation (RPA)
Robotic process automation enables companies to obtain better work efficiency with a relatively small investment. RPA uses bots to free up human resources and improve the way routine, repetitive business activities are carried out. This technology innovation is currently valued at $1.40 billion – look to reach $11 billion by 2027 (Grand View Research).
6. Voice Payments
When online banking started, no one could even imagine how fast it could develop. Expect voice to become a reliable way for individuals and businesses to conduct routine banking operations at the same speed. The convenience of speaking versus writing will help clients get the information they need quickly. Improvements in natural language processing, natural language understanding, and natural language generation will allow customers to use voice in banking transactions in such a powerful way that they will feel as if they are interacting with a human teller.
7. Big data
You will be shocked but in 2020, people created 1.7MB of data every second. Fintech providers and their clients generate massive amounts of data that can be aggregated to provide a more comprehensive view of a customer’s financial situation. Expect financial institutions to partner with data aggregators (see #3 above) so that they can use big data to improve customer retention and improve services.
It is certain that fintech trends will never be the same after 2020. The events of the past year have broadened our understanding of what the digital economy will look like going forward. Make sure to keep the latest fintech trends on your radar screen so you can maintain a competitive advantage by transforming the future of your business financing.