In older times, customers didn’t expect from a bank much more than storing their earnings and providing some way to spend or withdraw them. In the 21st century, this approach has been disrupted by innovative banks and other financial institutions, which demonstrated how quick, mobile-friendly, and affordable finance could be.
At the same time, modern consumers became accustomed to amazing omnichannel opportunities offered by such apps as Amazon, Uber, and many others aimed to simplify numerous once daunting processes in their lives. Today, fintech apps are about to enter a neat digital ecosystem developed by each customer to satisfy their needs.
Consider the following evidence of the incredible fintech rising:
- Fintech adoption rate is 64%
- 77% of people use mobile devices for payments
- Fintech startups received $128 billion in worldwide VC
- 70% of financial organizations utilize machine learning
- Blockchain can save banks above $27 billion by 2030
So, what do we imply by the term fintech? It includes software, and other technologies businesses apply to ensure expeditious, automated, and enhanced banking services. Fintech solutions are aimed at making banking services smarter and easier. What is more, the technology enhances the existing revenue streams for businesses and creates new ones.
It is already obvious that fintech will continue to become deeply embedded in the digital tools we use every day. But which specific benefits it’s about to bring, and which trends will shape the industry in the future? Let’s explore the main aspects.
Guaranteed software project success with a free 30-minute strategy session!
How banking benefits from fintech solutions
As the fintech industry is expanding, businesses and consumers are reaping the benefits of the fintech innovations.
Improved global money transfers enable companies to broaden the reach and areas of their services. In addition, by employing mobile connectivity, fintech solutions raise transaction quality and convenience. Eventually, customers enjoy many options to manage their finance while a company streamlines its operations.
Enhanced customer services and revenues
Fintech solutions optimize efficiency and boost the productivity of conventional financial institutions. Banks and credit unions start partnering with fintech companies to grow and provide more advanced services to their clients, increasing profitability and a more pleasant customer experience.
By leveraging the latest security techniques, financial institutions can ensure the most advanced and high-end monetary services. Such solutions as biometric data and data encryption enhance customer confidence and trust towards financial services.
Upgraded payment systems
Fintech also helps to issue invoices and collect payments with greater accuracy, thus making businesses more efficient. Consequently, the services become more professional, and customer relations improve.
Fintech can propel cost-efficiency for both consumers and businesses. The solutions remove hidden fees and allow for integrating online and offline payment methods into a unified customer experience. As a result, transaction methods become more convenient, and overall costs go down.
Top 7 fintech trends affecting the banking industry
Trend 1. Embeddable solutions for faster payments
One of the latest fintech trends is the implementation of embedded payment solutions. Modern customers expect quick, intuitive, and seamless experiences when it comes to payments. Unfortunately, this has not always been the case. Mistakes that may occur in manual processes and lack of visibility lead to inefficient and complex disbursements.
Unlike with embedded solutions, however. The technology allows businesses to effortlessly commit payments to suppliers or individuals utilizing various payment types, via any channel and from any originating bank account. Payment operations become possible with a few clicks turning the whole process into a breeze.
With the help of embeddable systems, businesses can deliver all their services, including payments and lending in-house, without referring to a third-party provider, hence the gains on the related revenue.
Trend 2. Open banking
One of the emerging trends in fintech is open banking triggered by the open APIs, which originated in Europe. A driving force of innovation in the fintech industry, open banking provides secure sharing of customer financial data with other institutions by means of application programming interfaces (APIs). The technology can potentially impact the global banking ecosystem, as it uncovers huge opportunities for both organizations and their clients.
Which specific advantages does this system provide?
- Extending banking offerings beyond traditional products and services
- Increasing customer experience and engagement
- Raising revenue potential by elaborating new revenue models
How will customer security be guaranteed then?
The access of third-party providers to banks’ APIs can bear the risks of breaches, data leakage, and other misuses. Companies should implement reliable authentication methods to prevent those risks and ensure non-compromised security.
Trend 3. Robotic process automation
Robotic process automation (RPA) is among the fintech technology trends that conquer the financial industry. The technology makes use of digital robots to automate routine tasks. By implementing such solutions, banks can minimize manual processing, scale operations, and boost the volume of transactions. So, what do they get ultimately? Free resources for higher-level jobs and increased profit.
To explore the full potential of the RPA technology, banks need advanced robotics process automation software implemented and adjusted to their unique processes. When planning a digital transformation, financial organizations should primarily determine which processes should be automated and ensure the creation of the right software for intelligent automation. An experienced software vendor can offer a vast range of services to guarantee efficient transformation.
DICEUS conducts automation projects for banking, including daily operations, customer experience, and risk management. We provide end-to-end services required for the project, from RPA program planning and software system audit to cloud migration and software robot development. The results are continual business growth and increased employee engagement.
The leading software developers can offer the following spectrum of services:
- Process automation for governance, risk management, and compliance
- Solutions for customer support
- RPA solutions for digital transformation
- Solutions for AML and fraud
- Advanced solutions for employee and talent development
- RPA solutions for operations
- And many more
Discover all RPA solutions for banking.
Trend 4. Artificial intelligence and machine learning
Some of the hottest fintech industry trends today are artificial intelligence (AI) and machine learning (ML). Apart from being an exciting and breakthrough technology tool, AI grants advanced benefits hard to overestimate. Consider this for a moment: integrating AI-backed with RPA is projected to cut bank operational costs by 22% by 2030. This means banks can save $1 trillion by implementing AI.
Impressive? Indeed, the technology can maximize savings and gains since it allows replicating human behavior while eliminating the human factor. Self-learning systems can analyze information and continually correct actions for enhanced efficiency.
AI and ML can be utilized in various spheres of banking. For example, the technologies can address customer queries and concerns, help clients make faster investment decisions, identify financial frauds, optimize data accumulation and usage, and more.
Experienced software developers such as DICEUS offer a range of AI-powered solutions for fintech that includes the following:
- Enterprise performance management
- CRM analytics
- Workforce analytics
- Advanced predictive analytics tools
- Supply chain analytics
- AI software platforms
Did you know that the most advanced chatbots today use natural language processing (NLP) to boost customer experience? DICEUS also offers such solutions and creates custom-tailored chatbot applications. By using these tools, financial institutions can deliver the most personalized interaction with their clients, meeting their needs and even anticipating queries.
Learn more about how we can help banks with AI implementation.
Trend 5. Cybersecurity solutions
Cybersecurity technologies are some of the most exciting and highly discussed fintech investment trends. Today, practically everyone is aware of daring hacker attacks that can even jeopardize national security or the global economy. Obviously, the everyday business operations of any financial institution are also susceptible to security risks.
What can a business owner do to prevent the negative consequences of breaches? This is where cybersecurity solutions come into play.
Cybersecurity measures are aimed to protect an organization from unauthorized use of electronic data. These measures can include:
- Encryption. Encrypted data will be impossible for hackers to read, even if stolen.
- Data loss prevention. These solutions ensure that your data is always easy to access for authorized users.
- Access management. Authorized access on a need-to-know basis is crucial to prevent the leakage of the company’s sensitive information. This group of tools provides access and identity management.
- Firewalls. These measures aim to protect against untrusted networks and potential malicious attacks by managing the outgoing and incoming network traffic.
- Anti-virus and anti-malware solutions. These fundamental cybersecurity solutions scan the system for threats and block viruses if detected.
- Web filtering. The technology allows stopping employees if they accidentally try to access harmful services that pose the risk of a data breach.
- Risk and compliance management. Governmental or other standards regulate cybersecurity in many industries. Risk and compliance management delivers a dedicated solution for matching these standards.
Trend 6. Mobile banking
Modern users choose mobile devices for performing their regular banking operations. In particular, 77% of people prefer to make payments this way. Why? Because a smartphone or a tablet is always at hand, while advanced digital technologies make virtually all bank services easily accessible through such devices.
Apart from the enhanced customer experience, mobile banking brings benefits to financial institutions.
- Reduces transaction costs
- Expands distribution
- Broadens the access to products and services
- Increases loyalty
- Allows implementing advanced marketing campaigns
These opportunities look so tempting to financial institutions that they tend to embrace the newest trends in mobile banking. According to the research by DICEUS, mobile banking will be influenced mainly by the following technologies.
Explore DICEUS service offering on mobile banking.
Voice-based solutions fueled by the burgeoning AI and increasing numbers of voice-powered devices are expected to revolutionize commerce. Customers are likewise eager to delve into the new exciting opportunities, as confirmed by the growing levels of voice payments adoption.
Voice recognition is another breakthrough tool that allows for quick and easy accessing accounts with the help of the user’s voice only.
Today, people already can withdraw their money from banks without credit cards. Such withdrawal is easy to commit by using a smartphone application. Banking and finance apps registrations increased by 71% in 2019. Convincing evidence of consumer interest, isn’t it? Mobile payments are quickly spreading, while convenience, speed, and transparency promise to fuel their further rise.
Personalized interaction is one of the most valuable aspects of managing client relationships. How can you enhance this interaction without the excessive burden on the call center? With chatbots powered by machine learning.
Chatbots ensure a personalized and seamless user experience, efficient support 24/7, and instant response. Besides catering to customer needs, smart chatbots can also measure customer satisfaction and train the bank’s employees.
Read more about mobile banking trends.
Trend 7. Innovative solutions for better customer experience and support
The newest digital technologies seem promising and tempting, but you should not put the cart before the horse. Every solution should be utilized in the right place, with the right purpose. With customer satisfaction put at the forefront, a company can properly align its digital transformation processes.
The first impression of your organization in the digital landscape is typically created through the user interface and user experience (UI/UX). While UI basically includes the visual look of your website, UX is related to the general interactions between customers and your solutions.
Your ability to build appealing UI and unique UX determines your customer satisfaction and loyalty. A professional UI/UX design company will comprehensively handle your digital transformation and create a flawless user experience.
Keeping pace with the fast-changing fintech trends
In the digital era, banks and financial institutions are facing drastic changes that bring both opportunities and threats. How can banks adapt painlessly and retain a competitive edge?
- Use technology to empower clients. The digital age has formed a totally new type of customer. They always stay connected, praise simplicity and immediacy. To match their needs, banking products and services should be adjusted to this behavior type.
- Transform the value proposition of products and services. The whole spectrum of modern methodologies should be used to enhance data analytics, develop a customer-centered design, and promote data sharing and engagement with the fintech ecosystem. On the one hand, this is the way to improve internal business operations and efficiency. On the other – to build comprehensive experiences around specific clients’ needs.
- Recognize the value of information. Real-time information offers endless opportunities. Such technologies as cloud computing and big data allow banks to process huge arrays of information, and most importantly – use it to design targeted products and anticipate customer needs.
- Collaborate with the nascent fintech players. Obviously, a company can implement the latest fintech trends in other ways, but such partnerships can give a bank a competitive edge by boosting innovation and growth.
If you seek to implement the most advanced approaches and need a customized software development engagement model, DICEUS experts will provide solutions ideally suited to your needs. We will determine the most efficient cooperation structure and get started immediately.
Guaranteed software project success with a free 30-minute strategy session!