It’s no secret that the COVID-19 crisis is disrupting the financial industry, many companies are counting losses and introducing cost-saving measures. Others are entirely overhauling their services in order to adapt to shifting customer demands. Some businesses, on the other hand, are presenting innovative financial startup app concepts for the post-pandemic era. For several firms in the finance industry, the role of apps in finance is helping switch to a digital-only format that is critical to their survival. Established financial institutions, who were once hesitant to adopt new technologies, are now competing with startups and finance app development.
According to a survey by ResearchAndMarkets, the fintech app industry will reach $305 billion by 2025, increasing at a 20% CAGR. Fintech is today one of the fastest-growing sectors in the world, because of the COVID-19 crisis, which has opened up a slew of new business prospects.
As we move closer to a post-crisis recovery, incumbents in the finance business will embrace digitization more and more, boldly competing with fintech firms. On the plus side, analysts believe the fintech sector will be able to capitalise on new opportunities generated by the COVID-19 situation. For example, the demand for digital payments is being pushed by continuing social distancing requirements. Nations are in a virtual hurry to develop national regulations for digital wallets, which is booming.
This is just one of the evolutions in fintech app development that is really pushing the fintech industry towards new horizons. Check out the latest digital trends in fintech.
Top Fintech Innovations for Businesses
The following trends are not necessarily new but are in the spotlight currently because of their increased adoption rate which has enhanced rapidly in the past few years, especially currently in the pandemic era.
Blockchain is the talk of the town
Many large banks are increasingly investing in blockchain FinTech solutions to keep up with future startup competition and avoid financial losses. They’re using blockchain technology, which boosts system performance, cuts out intermediaries, and stores data in the cloud. As a result, better data collection and storage are possible, as well as increased security and lower costs.
With blockchain technology, cryptocurrency users discovered that sending and receiving digital payments around the world may be done with little or no fees and with a minimum of banking rules. Another incentive to convert to blockchain technology is that it delivers safe money transfers and is resistant to any form of tampering. Investment advisers and wealth managers will have a decline in demand as blockchain technology advances, while compliance, regulatory, financial policy, and accountants and tax professionals will see an increase in demand.
Digital-Only Banks are trending effortlessly
The financial world takes note when a bank that only exists in the virtual world offers global payments, P2P transfers, contactless MasterCard with no transaction costs, and the capability to buy and sell cryptocurrencies.
There’s no need to visit a physical bank; there will be no lines to test your patience, and no tedious paperwork to deal with. When you use digital-only banks, you can reset pins from the comfort of your own home, pay bills with a photo, use simple cost management tools and rapid balance review capabilities, and obtain real-time data.
RPA is the shortcut to automation
Robotic process automation is a type of process automation that uses software robots or digital employees to automate operations that would otherwise be handled by people. RPA has already been deployed in the financial services industry to reduce costs and increase overall organisational efficiency. In addition, financial institutions have used RPA digital workers to automate a variety of back-end office tasks, including security checks, customer onboarding, account management and closing, trial balance, credit card and mortgage processing, and more.
The main advantage of RPA is that digital workers can complete these activities more efficiently and rapidly, freeing up personnel at financial institutions to focus on other important areas such as customer service.
AI & ML are truly disrupting banking
Banks all across the world are attempting to incorporate artificial intelligence into their operations. According to Autonomous study, AI will cut 22 percent of a bank’s operational costs by 2030. In other words, by implementing AI, banks may save up to $1 trillion. Furthermore, by processing data quickly, AI and ML enable banks and financial organisations to provide high-quality automated services. They also provide services such as personal digital assistants and AI-based chatbots for client support, in addition to better security.
FinTech companies can improve their customers’ financial literacy by providing them with advice on how to spend, save, or invest using FinTech solutions like voice assistants, reducing the need to write long messages and improving their customers’ financial literacy by providing them with advice on how to spend, save, or invest using FinTech solutions like voice assistants.
Neobanking 2.0 is the next big thing
With over 75 challenger banks throughout the world, the business is becoming saturated, with virtual alternatives to branch-based banking that allow for digital account opening without monthly fees. The demand for differentiation among neobanks is increasing as a result of competition. The next-generation digital-only banks are delivering more than just debit cards and basic checks, with apps focusing on financial recommendations and credit-building as well as niche-specific platforms. Non-FinTech firms with a stable client or staff base that may benefit from banking services will play a role in this development.
Digital Lenders are overtaking the traditional ways
Digital lending is one area where traditional banking firms fall short of customer expectations. The bulk of the time, the processes are slow and paper-based, and they haven’t changed much over the years. Borrowing through a traditional bank or credit union is difficult and time consuming at a time when consumers expect all of their digital interactions to be quick and straightforward.
The creation of specialised lenders as a result of this broken process has resulted in the processing of mortgages, auto loans, personal loans, student loans, and even credit cards being significantly more efficient than in the past. This has resulted in an extraordinary movement of market share away from traditional banks and toward fintech competitors who supply digital loans at scale with a laser focus on experience, contemporary technology, marketing expertise, and low-cost acquisition strategies.
Open Banking is exceeding innovation
This has emerged as one of the most significant worldwide fintech trends. By requiring established financial institutions to disclose financial data through APIs, the notion, which originated in the United Kingdom, lowers barriers to entry for alternative financial services providers and increases the possibility for innovation. While the scope of regulated sharing varies by country, the potential for innovative products and services within and outside traditional financial services is immense.
The ability to use consumer knowledge for personalised and contextual solutions has also opened the way for developers to construct solutions with completely new revenue models that do not rely solely on financial products, allowing for unique collaborations.
Smart Contracts are eliminating inconveniences
Smart contracts merely digitalize trust in a way that makes transactions strong, safe, and enforceable anywhere, without diving into the underlying technological, legal, or philosophical basis of contracts. Fintech is the motor that propels the financial technology industry ahead.
How are smart contracts capable of achieving this?
Consider the case of two persons in a transaction. Traditionally, they would hire a lawyer to draught the contract conditions on two sheets of paper & invite witnesses to ensure that the signees faithfully fulfil their obligations under the agreement. Any violations will result in legal action. Parties sign a smart contract with cryptographic keys as a digital signature in smart contracts. Contracts are written in computer language rather than on paper, hence the codes are nearly impenetrable to tampering, precise and perform predictably.
What’s The Bottomline
The role of apps in finance technology is evolving every moment. All of the above-mentioned Fintech trends and predictions will improve financial services as we move forward into the future. These trends will lead to greater transparency, faster transaction processing, better client service and more financial data availability.
We do not believe this situation will go away due to the industry’s quick growth and development. We expect more FinTech trends to emerge in the future, and we believe they are here to stay. Whatever the case may be, finance app development is experiencing a period of rapid growth.
If you want to take advantage of this, you may develop a top-tier FinTech service that provides consumers with a safe, straightforward, and convenient way to manage their funds. Contacting a leading FinTech solution provider is a good place to start.