Fintech innovation trends are at a tipping point and will impact finance in 2021.
Echoing to other industries, fintech has been evolved at a rapid pace over the past decade. And it is still continuing its development trends and relentlessly fine-tuning. From easy access to new bank accounts online to credit filling and unconventional payment methods, fintech is revolutionizing the finance arena. Fintech companies are constantly experimenting, developing and bringing new alternatives to financial products. This is all being done through massive global ventures. Reportedly, the funding in fintech companies in Q3 2019 was accounted for US$24.6 billion.
The unprecedented increase of customer expectation and to meet and drive gratified customer experience are also reshaping financial services, allowing for fintech to pinpoint the industry’s strength. Catering to the specific needs of customers, fintech companies have undoubtedly made significant leaps and bounds to create a customer-first financial tech infrastructure. Here’s a look at the top fintech innovations that are marked in 2020.
Digital-Only Banking
With the proliferation of advanced digital technologies and especially smartphones, traditional financial services providers have been forced to ascend themselves to the next wave of banking. Fintech is at the forefront of digital technology adoption and delivering innovation. A digital-only banking approach is the need of the hour, facilitating banking services via digital platforms, such as mobile, tablets and the Internet.
Payment Gateways
Soaring online shopping with e-commerce is giving the rise of umpteen payment gateways. In India, the payment gateway market is forecast to upsurge at a CAGR of 15 percent over the projected timeframe of 2020-2025. Simply put, payment gateways allow customers to pay through multiple payment modes using debit and credit cards, cryptocurrencies and digital wallets, all without to worry about the compromisation of sensitive data.
E-Wallets
With an increased push in conventional payment methods, the banking sector has been witnessing a growing number of alternative payments; e-wallets are among them. This is increasingly becoming a popular payment method for purchasing goods online. In more mature e-commerce markets such as the U.S. and the U.K., new e-wallets from traditional payment providers are aggressively being accepted by merchants. Statista and LearnBonds.com data show mobile wallets will hit over US$1 trillion worth of transactions in 2020.
Digital Insurance
In the modern digital age, no one can let go of the digital opportunities to stay relevant and resilient, and insurers are no exception. Insurance companies are increasingly turning to digital solutions to remain germane to their customers. They are building unique customer experiences by integrating information, business resources and digital technologies. Also, they take a customer-centric approach of the organization and implement innovative strategies, products, processes and experiences to create new revenue streams.
Cryptocurrencies
A digital asset designed to work as a medium of exchange, cryptocurrencies continue buzzing this year. Bitcoin is one of the most popular cryptocurrencies that is constantly attracting all eyes. Last month, the bitcoin price crossed over US$12,000 per bitcoin. Cryptocurrency payments can create a borderless and globalized economy while addressing financial inequality by bringing fast and secure financial services options to people without access to a bank.
Apart from these, alternative credit scoring, small-ticket loans, Peer-to-Peer (P2P) transactions, robust biometric authentication, regtech, and so on, have also taken place this year. Considering the future trends of fintech, the rate at which digitally active consumers are using fintech is incredible. It is also predicted that the consumer fintech adoption rate will witness a massive uptake as fintech companies in the next 12 months plan to invest in key digital technologies.
