Fintech Innovation Trends In 2020 And Beyond. We live at a time when technology is everywhere around us. It has already made a deep and everlasting impression on the way we live and work. As far as industries are concerned, technology has made them more efficient, profitable and customer-centric. The financial sector has always been a frontrunner in implementing recent technological advances.
The pace of change in the financial services and banking sector has never been faster. Right now, fintech is the epicenter of reinventions that we are experiencing in this industry. Over the past decade or so, we have witnessed the emergence of new fintech products and services that were created to improve specific areas of the financial ecosystem.
In the coming years, it is extremely likely that there will be more trendsetting developments driven by future financial technologies, globalization of financial services, rigorous regulations, and investor capital. Mentioned below are the top five important fintech trends for 2020 and beyond.
Digital-Only Banks:
Many of you may have already experienced that visiting banks these days is a faint echo of the past. Nowadays, mobile apps are being considered to be the future of banking and fintech. According to CACI, the popularity of digital solutions will continue to increase in the years to come and the online user proportion will reach 71% by the end of 2024. Lower costs for users, general availability, convenience, and extensive use of mobile technology in financial services are the main factors driving the growth of this trend.
Big Data:
Big data comprises all unstructured as well as structured information that can be processed later utilizing particular algorithms and analysis techniques. Along with predictive analysis, big data allows fintech companies to offer more personalized products to their B2B as well as B2C clients.
Big data engines can be used by financial institutions to better understand the online patterns and buying habits of the users for faster and more accurate detection and prevention of suspicious activities. IBM believes that in the United States, the number of openings for data talents will surpass 2.7 million by the end of 2020.
Decentralized Finance:
Decentralized Finance or DeFi refers to the reduction or elimination of centralized processes or one or several agents that have been involved in the implementation of traditional financial services. More and more companies are now applying online P2P platforms, edge computing, Artificial Intelligence, the Internet of Things, and distributed ledger technology to deliver more decentralized monetary interactions.
This emerging fintech trend has already started transforming payments and settlements. Driven by the need for elimination of bank legacy technologies, lower fees, and faster services, decentralized financial technologies are expected to have a strong impact on lending, trade finance, and capital markets.
Blockchain and Cryptocurrency:
All of us are well aware of the potential of blockchain in terms of disrupting the financial markets. This expansion has been huge so far and the same growth is expected in the future of the fintech market. In the near future, we will definitely see the emergence of many more new digital currencies, while the market transitions steadily from fiat to crypto. Regardless of what the regulators feel, digital money is being used for payments all over the world. This will prompt more businesses to join the bandwagon.
Adoption of Cloud:
The core of the ongoing financial revolution is all about how well the fintech companies can innovate and deliver customer-centered services. Without cloud computing technologies, this is not at all possible. A large majority of today’s fintech firms are opting to be cloud-native because it helps them improve in terms of scalability and agility as there is no need to waste valuable time on managing the data centers or IT infrastructure.
Be it at Agron, law offices, or financial services, technology will certainly have a major role to play in the near future. However, the financial services sector will probably benefit the most from these technological innovations.