Examine some of the Fintech trends that are expected in the fintech sector in the current decade
When people started using internet banking or phone banking in the last decade, little did they know that the world is rapidly entering into an era of Fintech! The combination of finance with technology has done wonders in making financial services more efficient and easily accessible to all. Today people can purchase things, make payments, apply for loans, crowd-funding, invest & withdraw money, avail themselves of banking services; all digitally from the comfort of their homes. AI and Machine Learning are helping the banks and other financial decisions determine the creditworthiness of customers and make financial decisions. It all may seem great; however, the fintech sector is still in its nascent stage and a lot is happening in the fintech space. Innovations and experiments are continuously happening. In the subsequent paragraphs, we will examine some of the trends that are expected in the fintech sector in the current decade.
The emergence of digital-only banks
Most banks are currently using digital technologies to provide their services. Account opening, payment gateways, loan application, video KYC, etc services are already being offered digitally; however, the banks still have their physical presence. Fintech is all set to change this. In the coming decade, we will see the emergence of banks without any physical presence. They will offer all their service virtually with the help of digital technologies.
Similarly, Open banking will also start emerging in India. Opening banking is already existent in Europe, however, it is yet to find its root in India.
Voice technology, AI, and Machine Learning
The role of AI and ML will become more and more important. Whether it’s data analysis, customer support, trend analysis, creditworthiness determination, or anything else AI and ML will find their application almost everywhere. Voice technology will also play an important role in the search, verification, and demand of fintech services online.
Enhanced cyber security
Everything connected to the internet is vulnerable to cyber threats. Fintech as it deals with money is a very lucrative avenue for cybercriminals. In the coming decade, as fintech keeps growing, the sector will see huge investments in cyber security. Biometrics will be the dominant mode of verification and cyber security in Fintech. Network-level analytics will become extremely important to prevent fraud.
Consolidation in the market
Currently, the fintech market space is comprised of numerous players, small and large. In near future, the larger financial corporations might acquire smaller players with strong technical backgrounds. This way, the larger players will not have to reinvent the wheel and they will integrate the technical capabilities of the smaller players to provide their services to their large customer bases. In order to counter the larger players with technical capabilities, two or smaller players might consolidate and become significant market players.
The government might formulate stronger policies
As fintech companies will start dominating the finance sector, the government will step in and start preparing a formal regulatory framework. So far, the government has been rather soft on the fintech sector in terms of regulations.
Buy now and pay later
“Buy now and pay later” will become a very important factor in the market. This is one step beyond traditional credit cards. It will have the advantages of a credit card at no cost. Few players have already started offering this service and it is expected to be the next big thing in the Fintech space.
Rise of cryptocurrency
Cryptocurrency is already a big player in the fintech market; however, it is yet to realise its true potential. A large section of investors is still sceptical regarding cryptocurrency. However, it is expected that in the coming few years, cryptocurrency will take the market by storm and become a preferred option for many investors.
Sunit Gajbhiye, CBO (Chief Business Officer), Financepeer
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