Trends! Love them or hate them, but when a group of like-minded people finds some ideas appealing, it tends to act as a loudspeaker in terms of broadcasting to a wider audience. As 2020 presented incredible challenges, specialists all over the world looked for safer alternatives even in the realm of business digitalization. Innovative fintech start-ups also continued to question the boundaries of our value understanding, pushing the incumbent financial institutions to tap into the online world as well. This resulted in the accelerated adoption of e-payment solutions and contactless banking services to quickly adapt to the new reality.
Altogether, these innovations are meant to make the digital banking and fintech arena a safer and more convenient place so that companies can offer their solutions and clients can benefit from them. In its turn, this radical shift birthed enormous potential and kickstarted some significant trends in the fintech sphere. Any guesses which ones? Let’s examine the most tangible of them for you to promote high-demand products in line with the customers’ needs.
#1. Autonomous finance
As people need to manage more and more daily tasks and consume an ever-increasing amount of information due to the hectic tempo of the world we live in, the thought of carving out 15 min to manage your spending becomes daunting. Not to mention all the time and effort required to open a relatively “hands-off” investment account.
To be exact, 85% of millennials reported feeling too burned out to attempt financial planning or research investment strategies, and this is where the latest fintech trend can come to the rescue. Autonomous finance is the recent development in the industry that appeared at the intersection of finances and AI.
In short, as more consumers place their trust in bank apps and online payment processing without the fear that their money will be stolen or that they’re just “numbers on a computer,” they also warm up to the idea of AI managing their funds. Actually, to get its essence, you can draw the parallel between the self-driving funds and self-driving cars. But instead of planning routes and avoiding traffic jams, autonomous finance apps will plan for retirement, suggest investment possibilities, and advise on debt management without any effort from the user.
Together with the financial literacy integrated into widely used apps, this can create a powerful blend for promoting effective ways of interacting with one’s funds. Are you thrilled and can’t wait to try?
#2. Financial literacy
As embedded finance programs are growing at an unprecedented rate, the public has discovered a growing need for an adequate financial education. Credit cards, “buy now and pay later,” and one-click shopping make it easier for the consumers to manage assets they don’t see or physically handle.
Nevertheless, according to Investment News, only 57% of US adults are considered financially literate. In contrast, younger people exhibit the fewer success in saving and higher levels of finance-related stress. Fintech companies that constantly deal with data on debt, spending behaviors, bills, and regular payments also admit that most of their customers are bad with money.
Can this behavior be altered? Certainly! Advanced financial literacy solutions don’t even need to be standalone applications, as they can be embedded as prompts into the primary banking applications. But to start developing your financial literacy skills, you can try Zogo, World of Money, Penny, or Investmate. They fit for all ages, and it’s never late to develop your financial expertise!
At the end of the day, saving and investing suggestions and over-spending warnings can effectively change customers’ behaviors to healthier ways of interacting with money and promote greater customer satisfaction. Are you one of those lucky ones or would like to be?
For centuries, traditional banks safeguarded their clients’ money. Have they done an excellent job? Not really! Whilst some have made valiant attempts, by and large, old financial institutions have failed the general public. The good news is that, with the open banking that is available today, you can access the better service quality.
Bringing fintech and banks together, open banking enables data networking across financial institutions. With PSD2 (Second Payment Services Directive), forcing banks to release financial information in a secure standardised form, the open banking practice lets users share that information with more ease, flexibility, and security than before. That, in combination with the right third-party app, provides everyday people with convenient investment opportunities that were absent to them before.
Obviously, the open banking landscape has got noticed in 2018, after generating almost 2 billion pounds. However, in a year, the sector already succeeded in quadrupling its worth, hitting somewhere around 7.2 billion. Looking at the 2021 open banking tendencies in the US and UK, it becomes clear that the connection between banks, fintech companies, and other third parties have tightened even more with the help of APIs.
The biggest criticism open banking faces is that the practice raises unresolved data security issues. But, as long as we also improve awareness and reasonable collaboration across institutions, we can avoid trouble and create value-added services at the same time. Plus, whilst open banking lets TPPs access bank information, banks themselves will feel pressured to improve their services.
#4. Biometric security systems
As a logical consequence of open banking flourishment, now we’re provided with the considerable financial instruments in our pockets, and the fact that the latter can be easily available in a snap is another immense accomplishment of contemporary fintech. But, you know, with great power comes great responsibility. So, what else should be considered?
Frankly, the biggest reason some people still steer clear of mobile banking is the threat of cyber crime. The more information and resources we have online, the more susceptible we’re to it. That’s how we’ve arrived at biometric security systems today.
Incorporating biometric sensors, mobile banking can elevate its security protocol without making things any less inconvenient for the user. The statistics is also confirming this statement, as 61% of consumers define biometric authentication as more secure or at least no less secure than the traditional banking tools. Besides, the speed of login into the system and operations procedure adds even more to the trend acceleration.
Meantime, as good as it sounds, the implementation of biometric security systems isn’t as straightforward as one might reckon. The systems that employ facial recognition aren’t going anywhere, especially as they become more accurate and reliable. The sensors that rely upon physical contact, on the other hand, should experience a decrease in popularity. Aside from the obvious hygiene issue, the COVID-19 protocol advises that we remove as much physical contact as we can from the equation, making these sensors the odd man out, so to speak.
But, even without taking the virus into account, contactless smart access systems have become pretty much commonplace before the pandemic, and the year 2021 should continue this trend.
#5. Voice technologies
Fintech can be its own bubble, but the ‘tech’ part in ‘fintech’ is equally important to the ‘fin’ part, which means that the financial technology space willn’t escape the trends that we observe in consumer tech. So, what’s the biggest tech trend? That honor goes to voice recognition modules. Like it or not, but the smart/assistant speakers, which laid the groundwork for this trend, turned voice recognition software into the new Bluetooth, with different companies putting it anywhere they can fit it.
Fortunately, the people at the fintech forefront seem to be more critical in this regard, seldom implementing voice assistants where they don’t bring much value to users. So, among the relevant fintech use of voice technologies, automated support agents should be named first. These fellows can provide basic account data, articulate card balance, reply to common client questions, set up recurring payments, categorise calls, and direct customers to the right place(s). Second in the list is the resort to the customer’s voice as biometric data, which allows authorising payments without employing facial recognition, fingerprint scanning, or anything of that sort.
As for the future expectations, the developing voice technology should be able to streamline infrequent transactions as much as recurring payments, letting you reroute funds between accounts or send money to people via platforms like Square Cash, PayPal, Monzo, Pingit, etc. The convenience is undeniable, isn’t it? According to Business Insider, the rise of voice tech introduction is believed to continue: from 8% to 31% of US adults will be using this function by 2022.
But more tech always means more potential security breach risk, so whilst the current year should bring with it more voice technology in fintech, we wouldn’t bet on it conquering the market just yet.
Fintech is here to stay, and it’s always better to be ahead of the industry than lagging behind, desperately trying to jump onto the bandwagon. The regular analysis of emerging trends may help you find the ones best suited for your business model and organically embed them into your product for the common benefit of both your company and the customers.
These above-mentioned trends have emerged as an active response to consumers’ needs, as they tend to help providers deliver better services and increase customer satisfaction. As companies and the industry as a whole move towards increased access to financial education, smooth transaction processing, clear and transparent communication with clients, and more secure authentication, we approach a new era of financial management.
Are you going to be an onlooker, or will you actively engage with the trends and become a driving force in the field? Perhaps, your solution will be next to appear in the “fintech trends of 2022 worth looking into.”