Financial Services Technology (Fintech) has revolutionized the banking industry by finding new processes in which people can spend, manage and invest money easily. This is quite a breakthrough because before the rise of fintech, the financial processes were slower and entailed more traditional ways of ensuring that money was accessed or invested by people.
For instance, there are more mobile apps that have steered more consumers to embrace digital currency, digital investing as well as digital deposits. This has prompted industries as a whole to rethink the way they conduct business or attract more customers through the digital platform. The retail industry, for example, has simplified the way consumers shop by introducing new techniques in which they can purchase goods online by authorizing transactions using valid identification details. This has majorly been made possible through AIs who execute many of the transaction procedures.
Currently, it is evident that all money related transactions have to be initialized by fintech; they are also involved in the implementation of new technology that have instigated the rise of a ‘cashless society’. As shown in the figure below, Europe is experiencing a rise in customers that are opting for digital payment option. This number is still expected to grow by 2025. Some of the trends that are changing the finance industry include:
Courtesy of AT Kearney
The Rise of Blockchain
This is the technology behind Bitcoins which is a form of digital currency. However, Bitcoins have become more popular than digital payments. To be specific, blockchain enables secure and safe trading in terms of money, copyrights, royalty fees or ideas; this has made it unnecessary to involve middlemen who would have helped in the management and facilitation of transactions. The blockchain could be utilized for the management of investments and all other valuable business-related operations. This process involves minimal security risk because it is virtual based.
The Rise of a Cashless Society
This mostly refers to the reduction of the use of physical currency. From 2017, Bitcoins have become increasingly popular and have raised eyebrows all through the finance industry. Bitcoin is entirely digital currency and it is not affiliated in any government or nation. However, it has raised a lot of controversy and most companies are finding it difficult to venture into its use. Nonetheless, Bitcoin does not need to be under any nation’s currency so that it can exist which means that fintech companies are making evident strides in all areas of the financial market.
Through fintech, banks can create personalized offerings to the users irrespective of the device that they choose. This means that banks will have the ability to change their apps appearance depending on what the customer is using it for. Such modifications will help customers connect with banks as well as introduce efficient self-service. Furthermore, this kind of automation will offer pre-filled data to the users depending on previous interactions, banking habits and preferences.
Even though there is a rise in cashless payments, many users still do not have the ability to leave their homes without any cash. It is important to note that demonetization has increased the shift to digital payments but it might take a longer time for it to become the main payment option.