Over the last few years, financial technology, more commonly known as fintech, has been gaining momentum throughout the world. With the increasing use of mobile banking, online investments, and even digital wallets such as Paytm, all major financial activities are now literally on our fingertips. No more going to the banks and no more waiting in long queues – fintech has made our lives much easier.
Here’s a list of top five fintech trends to look forward to in 2020:
Some of the major banks like HSBC and JPMorgan are using chatbots for better user experience. These virtual assistants are capable of providing 24/7 service and are not only programmed to prevent fraudulence and optimize day-to-day operations of the bank, but also to spread financial awareness among customers. And the bonus is that they save a lot of operational expenditure for banks.
In 2020, the chatbots are expected to become more matured in their functionality. In fact, according to Forbes, about 85% of banks would be adopting these smart digital assistants to interact with their customers.
Big Data and Personalization
Customer segmentation, managing risks, and detection of fraudulent activities are the three main functions of Big Data in fintech. What Big Data essentially does is analyse all structured and unstructured data of customers via specific algorithms so as to provide a more personalized user experience. What personalization does, in turn, is create a base for more loyal customers for businesses and financial institutions.
In 2020, Big Data combined with AI, is expected to provide more personalized real-time assistance to customers, which means that customers will get all the relevant information based on their requirement at the exact time they need.
RPA – Robotic Process Automation
One of the important fintech trends that has been constantly gaining traction, especially in banking services, is RPA. It simply refers to automation of some redundant processes such as customer onboarding and verification, risk assessment, security checks, etc., alongside other repetitive, and time-consuming administrative activities.
In 2020, banks and financial institutions are expected to adopt RPA technologies to organize and streamline their processes so as to enhance the level of customer satisfaction and to save on their operational costs and resources.
The Blockchain Revolution
An uneditable computer file that is decentralized and distributed so that everyone can access it, Blockchain is the book-keeping technology behind bitcoin. It is one of the major disruptors in the financial services industry today as it’s more efficient. Financial institutions spend billions of dollars every year to prevent fraud and identity thefts. The Blockchain technology has the potential to keep that in check and thus, saving the industry from incurring losses.
In 2020, finance experts forecast that the industry will amp up the use of Blockchain technology for share trading, signing smart contracts, identity management, etc.
More Focus on the Unbanked
As per the World Bank estimates, over 1.7 billion people around the globe don’t have access to bank accounts or any formal financial institution. This has multiple reasons; the main ones being not having enough money to open a bank account and general non-awareness with respect to finance management.
In 2020, reaching out to the unbanked will be one of the major fintech trends, with more and more startups exploring this arena. More innovative ways will be sought by financial startups to reach out to potential customers and explaining to them the ease of using new financial technologies.
Fintech is continuously evolving by the day and businesses and financial institutions are integrating it with their strategies to build a more loyal tech-savvy customer base. In 2020 and even after that, fintech will continue to be the major disruptor in the finance industry not only by making huge profits for businesses, but also by providing great personalized customer experience.