Similar to other industrial verticals heavily impacted by the pandemic, the financial sector didn’t remain unaffected. Today, more people turn to apps and other internet-based solutions to manage their finances than ever before. As per statistics, over 59% of Americans have used FinTech apps more than they did before the pandemic. For those brainstorming what FinTech means, it is an acronym of finance technology that has brought significant changes to the financial industry and transformed several sectors from banking to financial advisory services.
Since change and innovation are the only constant, people will become more comfortable and open towards FinTech trends in 2021, leading a rapid evolution of this industry. From disruptive start-ups to established enterprises, everyone will look for ways to revolutionize how people conduct their financial affairs.
With everything changing around us, what FinTech Trends will shape the financial sector in 2021? Let’s explore.
Trend #1: The rise of digital-only banking
To no one’s wonder, one of the best FinTech trends is transforming the banking sector into a digital-only bank. With banks providing for virtual payments, contactless swipes of taps with no extra transaction fees, peer-to-peer transfers, and opportunities to exchange cryptocurrencies, the financial sector is heading towards a rapid evolution.
With digital banking, customers can save precious time, which otherwise would be spent standing in queues and doing endless paperwork and still move around money the way they want to. Digital banks reduce visits to banks and allow customers to bank from home. Other than that, it offers several other advantages like quick bill payments, reset pins, review transactions, approve or disapprove transactions, and send money all from the comfort of a customer’s homes.
Trend #2: Adding biometric security to FinTech apps
With reducing smartphone prices and the rapid penetration of the internet, digital financing services like mobile banking will top the chart for FinTech trends in 2021. Since mobile banking will become a usual and convenient practice, it eases cyber criminals’ access to IDs and passwords. As such, mobile banking can lead to security-related issues. Therefore, banks investing in mobile solutions will need to add biometric systems to combat security threats. With face recognition, fingerprint identification, or retina scan, customers can stay assured that their personal and financial information is safe. However, the fun doesn’t end here. There will be more contactless biometric solutions that will eliminate the complete need for any touch-based identification in the future.
Trend #3: The rise of robotic process automation (RPA)
One of the FinTech trends, RPA, will maximize operational efficiency and accuracy. It automates mundane human-led tasks through robots or digital bots. Suppose you have trouble logging in to your account. You can chat with a digital bot, and it can help you with issue resolution. Since it saves the precious time of bank officials, which can now be dedicated to other significant tasks, several banks have already implemented the RPA technology in customer onboarding, security checks, account management, payment reconciliation, etc. With advancement in technology, using bots in the financial sector will improve task execution and allow humans to concentrate more on productive work.
Trend #4: Artificial Intelligence will make mentions
Undoubtedly, AI is a boon to the 21st century and several industry verticals, including the financial sector, adopt it to reduce operating expenses significantly. Be it customer management, security, customer identification, etc.- AI can help with everything. AI can help with identity threats, fraud risks and guard customers against cyberattacks. Several financial institutions have already incorporated AI-bots to help customers with fast issue resolution, and more is yet to come.
Trend #5: Complete payments with voice technology
Voice assistants are not a new thing for people. Siri, Alexa, Cortana, Ok Google, and so many have already made voice technology an old fable. However, the good news is, you can ask now voice assistants to make payments on your behalf. As more people try this seamless and easy payment solution, it will become a preferred mode, pushing back traditional payment methods on the rack.
Trend #6: Blockchain will become an industry disruptor
Blockchain is already disrupting the payment industry, and it will do the same to the financial sector, especially the FinTech. As one of the leading FinTech trends in 2021, blockchain ensures ultra-secure payments and transactions while eliminating any intermediate steps, reducing transactional costs significantly. As per statistics, blockchain technology will be responsible for 10% of the global GDP due to its following benefits to the financial sector, including fraud reduction, trading processes automation, client verification, intelligent payments, and secure payment processing.
You can read more about all financial trends here.
Trend #7: The broader usage of open-source APIs
APIs or Application Programming Interfaces are blocks of code that allow developers to build new apps and implement new features and services to the existing ones. As per a McKinsey study, over 91% of bank-developed APIs were privately held back in 2018, and there is a continuous rise in the open APIs in the market. It could be because of the PSD2 compliance of the open-source APIs. Irrespective of the reason for its fast rate of adoption, APIs create new world of opportunities for financial institutions to share technology, expand their offerings, and ultimately offer customer-centric FinTech solutions.
Trend #8: The rise of virtual cards
The popularity of virtual cards is growing tremendously year after year, primarily due to their high security. Since cybercriminals cannot steal information from such cards, users don’t have to worry about disposing of the cards after they expire. Moreover, users can better manage their expenses and eliminate any security threats whatsoever.
Trend #9: Practicing autonomous financing methods
Autonomous finance involves Machine Learning, Artificial Intelligence, and automation, allowing users to experience smooth and seamless mobile payments without requiring any details manually. A virtual banker manages your portal, analyses risks and investments, stores the FNS number, and reduces the risk of human errors by recommending the best payment strategies and options for your customers.
FinTech has brought about a remarkable revolution to the financial sector, which is why banks and related institutions keep a keen eye on the FinTech trends. So, as you explore the FinTech space, the above-mentioned best FinTech trends will make it easy for you to understand the market dynamics.