FinTech or financial technology is changing at a lightning speed. Advancements in this industry help financial services companies and their clients to avoid risks, avoid overspending, and better manage their finances.
What is FinTech?
FinTech stands for financial technology and technology helps financial services providers to better serve their customers. This all is supported by the use of technologies including Blockchain, Artificial Intelligence, Biometrics, and E-commerce.
FinTech is a collective term for the technological trends allowing banking to become smarter and faster. Applied individually, they can make a business enterprise more efficient, as well as easily interact with customers, employees, or suppliers.
FinTech solutions and apps have received positive feedback in times of the pandemic. And the number of users will only increase from here onwards ensuring finance remains simple, quick, convenient, and secure for the customers.
Yes, 2023 can prove to be a game-changing experience where new trends are introduced for FinTech. In this blog post, we are going to talk about the major trends for the year 2023. So, without any further delay, let’s start to understand their relevance in Fintech software development for the banking & finance industry.
Top FinTech Trends of 2023
The trends that we discussed here might not necessarily be new. But their adoption rate is visible and we believe that this rate will surge in the year 2023.
1. Digital-only Banks
Digital-only banks provide different virtual banking services including P2P transfers, international remittance, contactless MasterCard with no transaction charges, and with ability to buy various cryptocurrencies including Bitcoin, Ethereum, and the list goes on.
These virtual banks have gained huge popularity in a short time frame. It’s majorly because it offers remarkable convenience to the customers by removing tedious paperwork, waiting in long queues, and the need to visit the bank in person. These benefits are the main reason for the rise of digital-only banks.
Blockchain technology has completely changed the working model of the FinTech industry. With this innovative technology, transactions are simple & secure to perform. All because of this banks and financial institutions are taking a keen interest to adopt Blockchain technology to enjoy its benefits.
One important thing is that it’s just not only cutting-edge technology but also new decentralized finance that focuses on reducing centralized processes. In Blockchain, once the data is recorded in the system then it becomes highly difficult to modify thus it remains secure.
Blockchain ensures information stored is secured end-to-end along with the minimum risk. It is also used to guarantee secure cross-border payments.
Banks and financial institutions are increasing their investments in Blockchain technology to lower expenses along with growing efficiency.
Robotic process automation is basically a process automation technology using software robots to automate the tasks which were earlier done manually. The financial service industry is already applying RPA to remove costs and improve overall organizational efficiencies.
In addition, financial institutions have also adopted RPA digital workers to automate different back-end office activities including security checks, trial balancing, customer onboarding, account maintenance & closing, credit card and mortgage processing, and several more.
The major advantage of RPA is that the digital workers can clear these tasks in an efficient manner thus allowing financial institution personnel to focus on major departments like customer service.
4. Artificial Intelligence & Machine Learning
Artificial intelligence is perhaps the most important technology of all. Banks globally are now looking to integrate AI into their operations, AI will eliminate 22% of the bank’s operational expenses by the year 2030. That means banks can save up to 1 trillion dollars by employing AI.
In 2023, Fintech apps may continue to use AI with more advanced chatbots to address customer queries, fraud-prevalent tools to verify the authenticity of KYC documents, and other innovative functionalities to improve the personalization of financial services.
AI can also be used to manage growing cybercrimes by identifying financial threats.
5. Biometric Security Systems
FinTech and mobile apps have brought banking to our fingertips. But it’s also true that it has raised several security concerns as the hacking activities related to banking are increasing at a rapid rate.
This calls for important security measures which FinTech companies must implement. Biometric security systems have emerged as reliable measure that takes security to the next level. It offers users and institutions the confidence that the data is safe and protected.
Right now, the biometric industry is in its transformative phase as it’s witnessing some major changes. As per the reports, biometric sensors which include physical touch are estimated to decline.
In the future, contactless biometric solutions are all set to overtake touch-based biometric solutions. One major reason behind this shift is the pandemic.
People are avoiding cash transactions and all other payment processes which involve touch. That’s why contactless biometric solutions are witnessing a higher adoption rate in times of COVID-19.
6. Big Data Management
Financial organizations collect large volumes of data, most of which are unstructured. To be useful for identifying crucial trends and possible risks that help to make improved decisions, the data must be processed using strong & robust analytics tools. Organizations gather a large volume of structured data as well, majorly from loan application forms, tax documents, and bank statements.
An important goal for 2023 is managing all data in an efficient manner as good data insights are important for identifying opportunities and optimizing products as well as services.
Hence, Fintech developers will be developing banking & finance software solutions to extract information quickly and accurately to speed up data processing.
These trends will end in better transparency, faster transaction processing, improved assistance to the client, and better availability of financial data. The FinTech revolution is gaining tremendous traction on a daily basis and in 2023 it’s all set to further disrupt the banking and payments industry.
Chandan Kumar is working with a top-rated FinTech App Development Company, OrangeMantra as a senior research analyst. Having years of experience and expertise in the app development industry, you can avail the latest information on the latest technologies. Share your comments and feedback to improve our blog.