Businesses across the globe faced revenue fall and negative customer retention during the pandemic. However, industries such as banking and finance which have adopted technology beforehand and were unintentionally ready for the pandemic saw an upward trend in their revenues. Several FinTech use cases including, contactless payments, , and digital banking saw an upsurge in customer adoption. "revealed that in Europe, FinTech apps have seen an incredible rise of 72% due to the pandemic". online stock trading Research by deVere Group Not only in Europe, but the situation is also quite similar in the USA. A survey by Plaid found that . Moreover, 73% of the US population believes that FinTech is the new normal and they’ll continue to use FinTech apps in the post-COVID era. 69% of the Americans agreed that FinTech apps were a lifeline for them during the pandemic Indeed, FinTech solutions have been overwhelmingly appreciated during the pandemic. If we consider the reports, the trend will continue to spread. Many banking and financial institutions are either investing in or upgrading their digital infrastructure to leverage the opportunity. Customers will continue to adopt innovative FinTech solutions to make their financial handling simpler FinTech development 2021 Will Only See The Upsurge Of FinTech The year 2021 will potentially be the milestone year for financial technologies, as industry experts believe that new innovations will happen in the post-pandemic era and institutions will implement new financial technologies. However, with the increase in customer adoption, FinTech space will evidence cut-throat competition among FinTech companies. FinTech companies should focus on investing in the following FinTech trends to stay ahead of the competition. FinTech trends to watch out for in 2021 1. Digital-Only Banking For the past couple of years, we’ve seen an increase in the number of banking institutions operating . These banking institutions provide their customers with a variety of services, including international remittance, contactless MasterCards, peer-to-peer money transfers, contactless payments, and many more. only via digital-infrastructure Digital-only banking services eliminate the need for the customers to physically visit the bank branch to update their bank accounts, carry out transactions, or access several other banking services. The 24*7 availability of banking services makes it more appealing for the customers to adopt it. Moreover, the operational cost of digital-only banking institutions is comparatively low to conventional banks as they operate with lesser human capital and minimum physical infrastructure. Hence, digital-only banking tends to gain more customers while having low service costs. 2. RegTech The banking and finance industry is trying to cope with the challenges of fraudulent activities due to increasing digitization. Many FinTech businesses have come to the rescue to help fellow FinTech businesses reduce the risk of data theft and cyber hacks by utilizing the power of advanced technologies such as data analytics, blockchain, and machine learning. These solutions are categorized under the term - RegTech. Regulatory Technology, aka RegTech, . The banking and finance businesses have to deal with several industrial regulations such as AML (anti-money laundering) and data security. Hence, it becomes complicated for them to be compliant with them. helps businesses with the management of their industry compliance and processes The term "RegTech" refers to many solutions that are designed for reporting, monitoring, and compliance management. Using RegTech solutions, these businesses can automate most of their compliance management process, which ultimately results in greater efficiency. Even if the banking and financial institutions are operating in diverse political boundaries, RegTech solutions can simplify their compliance management processes. 3. Blockchain Although this FinTech trend is related to RegTech, it is essential to list it as a separate FinTech trend due to the scale of disruption it can bring. Since fraudulent activities, such as identity theft and data breaches, cost billions of USD to the banking and finance industry, implementing blockchain technology into FinTech solutions can help prevent the loss. The argument is also supported by a Marketwatch study that revealed that . blockchain investments would grow to $5,600 million by 2023 Blockchain is a technology that enables data decentralization while improving security at the same time. Current applications of blockchain in the FinTech space include smart contracts, international trade, contactless payments, and customer identity management. Source: Pinterest 4. Open Banking Open banking has been amongst the hottest topics of discussion among CTOs in the banking and financial sector. Open banking facilitates information exchange in the FinTech ecosystem, resulting in ease of money lending, customer information access, and even helps customers save money. For example, third-party money lenders can use APIs (application programming interfaces) to access customers' credit scores. The open banking trend of FinTech is bridging the gap between FinTechs and banks. It brings them together by enabling data networking across the FinTech ecosystem. The Second Payment Services Directive (PSD2) in Europe forces banking institutions to share customer financial information in a secure and regulated environment. 5. Financial Inclusion The inclusion trend has a significant contribution to the growth of FinTech worldwide. World Bank data shows that 69% of adults worldwide, which roughly counts to 3.8 billion, have an account with either a mobile money provider or a bank. The data also reveals that 1.7 billion adults still are unbanked, even though 66% of these individuals own a mobile device that can enable them to access digital banking services. The majority of these individuals belong to developing nations, where mobile device penetration is high. The lesser cost of operation for FinTech businesses makes it a lucrative opportunity as the demand for FinTech solutions is high in these markets. Hence, banking and financial service providers can cater to this need for financial inclusion. 6. Robotic Process Automation Robotic Process Automation, aka RPA, is the process of automating several business operations with the use of technologies. Not only FinTech, but RPA is also a trend in several other industries. However, in 2021, RPA will continue to automate redundant tasks in both the back-end and front-end, such as customer onboarding, accounts management, customer service, trial balancing, and many others. A trending example of RPA implementation is chatbots. Enabled by conversational technologies such as speech recognition and natural language processing (NLP), chatbots are automating customer service in banking and financial services. Concluding Note The use of technology in the banking and finance industry has been increasing for the past few years, and 2021 will continue the shift. The 6 technology trends we've discussed in this article will cumulatively pave the way for greater efficiency and security for the FinTech world.

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The Upsurge Of FinTech And FinTech Trends To Watch Out For In 2021

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