Sunday, June 23, 2024

Six FinTech Trends of 2022

FinTech, an amalgamation of words, financial and technology, is a term that applies to any emerging technology that aids consumers or financial institutions provide financial services in newer, quicker ways than was traditionally available. For example, think of the difference between stepping into a bank to check your balance and the ability to get that details in real-time on your phone, and you will have an idea about FinTech’s effect. In other words, FinTech entrusts consumers to take charge of their financial lives by leveraging advanced technology. 

With the new year 2022 in the NEW NORMAL phase, the FinTech industry has accelerated, unlocking its true potential and value to the financial sector actors. The previous year, 2021, witnessed a lot of money exchanged through FinTech. As per Statista, “FinTech investment value increased in 2021 to 210.1 billion U.S. dollars.” Nevertheless, the FinTech industry is transforming itself every year with new terms in the financial arena. Thus, 2022 can be a milestone year with path-breaking innovations in FinTech. Therefore, we have listed some trends that we believe are going to rule in 2022 and shape the future of FinTech; so, without further ado, let us see discuss six FinTech trends to keep an eye on:

  1. Digital-Only and Neo Banking

Digital-only banks are the new-age banks that provide financial services to their customers without having any physical presence anywhere. Instead, it provides virtual banking services like P2P transfers, international remittance, buying various cryptocurrencies like bitcoin and Ethereum, contactless Mastercard with free transaction fees, and more. These bank has achieved immense popularity thanks to their offerings, such as the elimination of paperwork/physical presence/long queues. Moreover, the good part is these technologies have contributed to the transition from a centralized, standard banking model to a more broadcasted, technology-driven one. 

Noe banks are also taking the monopoly of a few big names in the industry by making the banking world convenient and breaking the chain of conventional markets. While in India, where banks are not permitted to 100% digitalization, FinTech companies have started functioning as Neo banks. With the rapid growth of smartphone users, Neo-banking has an unprecedented scope to evolve.

2. Blockchain Technology

Blockchain technology has created wonders in transforming the FinTech industry, and hence it is among the top trends of the year. This cutting-edge technology with cross-border payment systems is extremely popular as digital transactions, and the data are entirely secure with Blockchain. Therefore, you can make your product stand out with efficacy, speed and security. Many banking and financial institutions adopt this technology because of the decentralized payment system. Moreover, it helps reduce expenses, enhance internal procedures, and improve workflow dynamics. Also, this technology has inspired the development of various P2P financial platforms to perform monetary transactions and thus enhance their investments.

3. Artificial Intelligence (AI) and Machine Learning (ML) 

Worldwide, the banks are exploring prospects of integrating Artificial Intelligence (AI) backed by RPA in their business operations to save an extreme amount of money. AI and ML have enabled the banks to process an extensive amount of data set and reach closings due to their ability to analyze real-time patterns, assisting with fast decision-making. Further, FinTech firms are constantly researching the areas of AI that will be helpful for banks with their fraud detection processes, loan decisions, and credit/customer services.

In 2022, the FinTech applications will continue to use AI and ML in independent finances to save consumers money. In addition, this will help the users make instant decisions about their money investments, manage cybercrimes by identifying financial frauds, and use chatbots to address customer queries. Moreover, it is beneficial to automate backend processes like customer onboarding, security checks, etc.

4. Voice-Enabled Payments

Voice technology has evolved nowadays not just to announce the weather forecasts or play songs but to become a key element in the financial transactions of the banking sector. AI-powered voice technology can act as an automated support agent to perform challenging tasks like replying to typical client questions, providing primary card balance and account data, scheduling/categorizing calls, setting up recurring payments, etc. Furthermore, the consumer’s voice can be used as biometric data to begin a payment which relieves consumers. Although consumer trust is a pressing issue for implementing this technology with a concern of security breaches, the potential of voice payments is sky-high, from transferring funds between accounts to sending money to friends from various platforms.

5. RPA

Robotic process automation (RPA) is a process automation technology that uses software robots or digital workers to automate the tasks humans usually perform. RPA enables firms to obtain adequate work efficiency with a reasonably small investment. Therefore the industry has already started implementing RPA to cut costs and improve organizational efficiencies. Further, RPA digital workers also ease the account maintenance/closing, security checks, credit card processing, trial balancing, customer onboarding, etc. Moreover, RPA already handles several tasks in the industry, such as fraud detection, tax reporting, streamlining accounts and more. Therefore, RPA allows the institutions to focus on other important areas like customer service, and it will also be a vital part of FinTechs soon.

6. White-Label FinTech

The predominant FinTech trend that you should not miss out on is White Labelling. White-label FinTech is a service in which a FinTech company buys from a provider and rebrands before they are sold. White label FinTech solutions quickly let businesses of all sizes create a global payment gateway. In addition, it gives users a win-win situation as the distributor gets a more extensive customer base, minimizes launch costs, and saves the reseller’s time. Moreover, it allows companies to outsource financial applications to get into the market faster while maintaining relevance in the ecosystem.

In a nutshell, the FinTech trends are ever-evolving, with rapid digitalization and technological advancements every day. Although the nature of Fintech is inconsistent and thus causes it to be vulnerable to sudden changes, we can expect FinTech to continue to expand its presence and scope. Consequently, it is most likely that the coming year will make financial services better and more fruitful for the FinTech sector.

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