Fintech emerges as a fast-moving industry and the future is promising more opportunities and innovation.
In the last few years, the way financial institutions function and people practice their finance has significantly changed. These are all credited to the growth of new digital technologies such as AI, Big Data and Analytics, and the emergence of FinTech (Financial Technology). The FinTech industry has revolutionized the payments infrastructure from the bottom, breaking down fences and minimizing the deep-rooted advantages the biggest firms used to hold. From the proliferation of mobile wallets to the development of digital-only banks, payment innovations are substantially making its way into breaking financial hurdles and enabling uses to make payments globally.
Since fintech is growing at a rapid pace, its future will continue to be developed and fine-tuned, enabling more secure financial planning and satisfy customers.
Let’s have a look at the top trends redefining the fintech industry in 2020.
As the world currently is struggling to back to the track disrupted by COVID-19, fintech firms are propelling innovations in order to respond to the crisis. They are coming up with innovative payment solutions and contactless payment is one such financial development. As contactless transactions are nothing new, since 3 percent of cards in use in the U.S. were contactless, while 64 percent in the U.K. and up to 96 percent in South Korea in 2018. Meanwhile, COVID-19 has accelerated this finance model to the next level as it has brought physical distancing that enabled contactless payments at the forefront of our shopping experience.
The major advantage of a digital-only bank is the promise of better financial returns. As also known as neobanks, digital-only banking allows users don’t have to go to a brick and mortar bank. That means a person will not have to wait in line or deal with bank tellers. This type of banking experience delivers banking facilities through digital platforms such as mobile, tablets, the internet, among others. Digital-only banks are most beneficial to millennials who always seek new experience. Its key features, especially real-time data analysis and agility, differentiates it from conventional banking.
Adoption of Cryptocurrency
As a digital currency, cryptocurrency has a rich history disrupting the future of finance. However, the uncertainties around the digital currency still leave a room for the analysis of its unreserved acceptance, trust and anticipation. In order to adopt digital currency, financial institutions should carefully consider the technology underlying these cryptocurrencies as a potential generic new way of transferring ownership of the value over the long term. According to Yahoo Finance, cryptocurrency has reached US$200 billion-mark industry. Further, the diffusion that cryptocurrencies bring in the modern world expands the antitrust issues related to network externalities and global competition between most explored world currencies.
Since fintech covers all aspects of financial services providers, consumers and investors, it is one of the highly regulated industries. Undeniably, the evolution of new fintech solutions deliver significant benefits to consumers and investors. In order to seamless financial delivery, there have been a key regulatory development that has a considerable impact on the global FinTech ecosystem. According to a KPMG report, the regulatory and supervisory response to fintech has evolved through three stages. Initially, the response was to focus on the benefits of the industry and on supporting the growth and adoption of new fintech solutions.