2017 reached milestones in revolutionary technological innovations within all facets of life, establishing a solid footing to grease 2018’s wheels to continue this positive domino effect. The financial services sector looks up to ‘FinTech’ – the disruptive proprietor for transformations in the industry, to meet consumer expectations and take the industry a step forward. As technology develops and people become more tech-savvy, everything including finances will witness profuse changes. With convenience and speed in its DNA, FinTech is reaching great heights by revolutionizing the entire spectrum of financial services.
Let’s take a look at what 2018 has in store for FinTech.
Regulation of data
This year brings a multitude of regulations, particularly in Europe. The revised Payment Services Directive (PSD2) was established mid-January by the European Commission, instilling the ‘open banking’ model, compelling financial services companies to have greater transparency of data. Through the use of Application Programming Interfaces (APIs), personal financial information will be easily available to regulated third parties other than your bank – taking competition levels to new heights. On the other hand, the General Data Protection Regulation (GDPR), coming into effect this May, is meant to ensure that customers have greater control over personal data.
Unite and conquer – Banks and FinTech companies collaborate
Once competitors, now alliances – FinTech and financial institutions see an opportunity to walk hand-in-hand down the aisle of success, to provide smarter and more efficient technology to serve the ever-evolving needs of consumers. Collaborating the strengths of legitimacy of traditional banking with the innovation and flexibility of FinTech will be the wisest way to mutually benefit and aid the respective financial endeavours. Due to value added consumer-centric solutions, traditional banks partnering with FinTech are seeing higher customer retention rates and revenues.
Mobile still calls the shots
In this day and age and its competitiveness, it is compulsory to be able to send money across the globe instantaneously. Considering current advancements in the industry, today’s generation demands digital-only banking to satiate their needs of simplicity and speed. Carrying last year’s technology forward, as consumption continues to increase, integration of technology through mobile applications will unceasingly progress. This year will experience state-of-the-art frictionless digital banking by endorsing single click payments, cryptocurrency opportunities, conversational technology (chatbots) and biometric records (voice, fingerprint, iris) to eliminate the use of passwords.
Blockchain forming the norm
Blockchain, the technology behind cryptocurrencies, was the second most searched word on the internet last year. However, as much as prices and general public interests soared, the hype is slowly settling and is turning into more of a norm. What benefit will blockchain have on the FinTech industry?
The finance sector sees the adoption of blockchain technology as a revered asset that can be greatly leveraged across the board. A decentralized digital ledger, connected to all users in the “block” while being encrypted proves to reduce costs and greatly lower transacting and settlement complexities, meanwhile enhancing security remarkably. As this technology gains credibility, transacting through blockchain wallet applications, carrying out settlements and peer-to-peer transactions will be interesting developments to keep an eye on in 2018.
FinTech’s competitive edge – Big Data & AI
FinTech companies will employ machine learning algorithms to churn masses of data, enabling increased efficiency and revenue. As information patterns are detected, tasks are improved upon, making information processing quicker every living second. AI can detect any fraudulent behaviour, potential software hacks and is able to provide automation in financial report creation.
Educated expert conversationalists - Chatbots
AI doesn’t only take the shape of back-end ingenuity, but also runs its show on the forefront by interacting with customers in an automated yet personalized way through Chatbots. Machine learning and the use of logic trees works just like education – the system learns with every new interaction with a customer, ensuring tailored results.
‘Smart’ takes on a whole new meaning as voice search has slowly paved the way to become the next big thing in technology. As the world goes hands-free, bank accounts may be accessed and payments can be made simply through voice commands. Alexa might even be your next financial advisor. Even the mere financial security through passwords is being eradicated as voice biometrics become the key to personal financial surveillance.
Welcoming the beginning of the FinTech era
The finance world will see greater transformations in the coming 10 years than it has in the past 100. Change is inevitable, and FinTech follows suit by generating and implementing cutting edge technology to stay afloat in such a rapidly advancing, competitive world. Technology is engineered to outperform humans by far and in the financial industry it is focused to reducing time, costs, overall complexity and errors.