We all are accommodated with fintech in this modern era of digitisation. The trend is rising especially after the COVID-19 pandemic.
Also, we face rapid fintech transformations on a daily basis and virtual cards, ATMs, mobile transactions and digital wallets are becoming a new normal. Cutting-edge technologies claim that the fintech horizon is expanding more rapidly than ever in the upcoming future.
The majority of the businesses faced a downfall when the COVID-19 pandemic hit. Only a few of them were smart enough that somehow successfully showed an upward trend and out of them, one was the fintech industry.
Both businesses and customers start utilising contactless payment methods to avoid physical contact with each other. According to a study, there was 72 per cent of evident usage of fintech apps in Europe, especially since the occurrence of the COVID-19 pandemic.
Following are the top 5 predictions that will take over the world especially in 2021 and later upcoming years.
Digital banking
Virtual banking services are expanding in the industry of digital banking. Those services include contactless MasterCard, P2P transfer and international remittance with free transaction fees and also with the ability to buy various cryptocurrencies such as ethereum and bitcoin.
In such a short time period, digital banking gained immense popularity. The main reason for this evolution is that it provides customer due diligence and also eliminates tedious verification processes based on paperwork and visiting banks physically.
According to a report, it was a 36 per cent conversion rate from physical visitors to online bank users from the year 2017 to the year 2022. In 2021, a huge surge can be seen in digital-only banks and this surge will significantly drop the number of physical bank visitors.
Blockchain
According to Business Insider Intelligence, around 48 per cent of the bank representatives think that there’s a great impact of blockchain technology on financial infrastructure.
The revolution in the fintech industry is because of innovative and rapidly evolving blockchain technology. Transactions can be carried out in a secure and safe manner with the help of this cutting-edge technology.
Blockchain technology also minimised centralised procedures of online transactions. This technology also ensured customer due diligence and enhanced risk assessment. Also, the customers’ information is secured end-to-end.
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Monetary transactions are enabled by many peer-to-peer (P2P) transaction platforms and this technology is invoked in a wide range of financial sectors to deter fraud, reduce expenses, and enhance internal procedures.
Biometric security systems
Mobile banking, ATMs and e-wallets are becoming a new normal. Integration of biometric security systems with the fintech industry ensures that everything is just one fingertip away. Massive security-related issues are solved by incorporating biometric authentication services in financial infrastructure to control rapidly evolving cyber crimes.
It is mandatory for organisations that involve financial transactions to incorporate all the possible security measures. Keeping in mind threats in cyberspace, biometric identification technology is playing a crucial role to deter fraud.
In the upcoming years, more advancements in AI-based biometric identification systems can be seen to take security to the next level, providing an enhanced customer experience.
According to a study, identity verification solutions that involve physical contact are facing unpopularity. Contactless solutions of biometric systems will take over touch-based fingerprints in the near future.
AI/ML
Customer identification plays a crucial role in keeping in mind the immense rate of fraudulent activities and illicit money transactions. Thankfully, Artificial Intelligence has managed the increasing rate of cyber crimes and also plays a vital role in enhancing the fintech industry.
It is predicted that by the year 2030, financial transaction and operational expenses will be reduced by 23 per cent because of artificial intelligence and machine learning.
Advanced AI and Machine Learning algorithms have made the customer repository in financial infrastructure more accurate and have made the data recording process efficient.
Banks and sectors that involve financial transactions are investing a large amount for incorporating AI and ML-based technological advancements for customer due diligence, and for incorporating cutting-edge technology for customer service such as chatbots, etc.
RegTech
The advent of technology has risen the risks of fraudulent activities such as money laundering, cyber attacks, data breaches, etc. Regulatory technology, abbreviated as RegTech, is the technology that is used to manage regulatory processes in financial infrastructure.
RegTech technology involves the following main functionalities: monitoring, reporting and compliance. Demand for cloud-based platforms will increase in 2021 to promote a contactless future, especially in COVID-19.
RegTech is basically a more advanced form of fintech technology, invoked by higher authorities into financial institutions. RegTech empowers technologies with advanced security features to deter fraud and illicit money transactions.
RegTech, in compliance with ML and Big Data, can fight a great battle against data breaches, protects customers and ensures financial stability.
The rising tide of AI is becoming immense as we move on to 2021. This massive innovation is leading use towards an unpredictable future of social upheaval. Contactless futures are becoming a new normal keeping in view an increasing number of coronavirus patients.
Also read: Here is the e27 Malaysia Fintech Ecosystem Report 2019
The purpose of advancements in fintech trends is the transparent relationship between business and customer, enhanced customer experience, and risk assessment using biometric solutions, KYC/AML compliance, and digital identity verification.
Integration of fintech innovations with blockchain technology is gaining tremendous transaction in the upcoming era of digitisation. Further disruption can be seen in 2021 and upcoming years in financial infrastructure, especially in the digital banking sector.
If you are looking for online transaction solutions, make sure that you integrate yourself with such a financial sector that involves enhanced fintech solutions, advanced risk assessment technologies, and also which presume simple, secure and convenient management of financial transactions.
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