Tech Content Writer
As we inch closer to 2023, we can see rapidly how the fintech industries are rapidly evolving by embracing digitalization. The advancements made in the finance industry have now completely replaced the traditional methods of banking with tech solutions making things easier, faster, and more streamlined.
The innovation in the fintech sector has resulted in a great shift in the traditional financial methods and services that has led to drastic changes in how these financial companies operate. Not to mention that the entire financial services landscape has been completely revamped by innovation as people are now getting better access to financial products and services with improved fraud prevention, thus offering financial institutions newer opportunities to grow.
Fintech businesses are now leveraging the latest technology trends for keeping up with the growing financial pressure and maintaining a sturdy revenue. Going forward it is anticipated that the world will see changes in the way people interact and maintain their financial transactions.
The top fintech trends are expected to shape businesses, consumer demands, user experience, and much more in the upcoming year. Let’s check them out.
Top 5 Expert-Predicted Fintech Trends Of 2023
With 2023 right around the corner, it’s time for us to analyse the top fintech trends that are all set to dominate the financial services industry in the years to come.
1. Artificial Intelligence
Artificial Intelligence (AI) is one such thing that has found itself in the list of top tech trends time and again. AI is gradually becoming the best technology globally utilized for its superiority in image and speech recognition, voice assistants, navigation apps, and automation, in the fintech and banking industry.
With bank revenues exceeding national income, it is no surprise that why banks are now speedily embracing AI. As per a recent survey, it is projected that AI will reduce the banking operations cost by 22% by the end of the year 2030. AI is also well poised for dealing with the growing incidence of financial fraud threats and cybercrimes. By leveraging the services of a reputable financial software development company, fintech businesses can build smart systems and chatbots for giving customers the convenience they demand.
2. Blockchain Technology
Blockchain and its intriguing potential have remained the center of attraction for businesses across the globe. The financial sector has remained a forerunner in tapping into the power of blockchain for its numerous benefits. Blockchain has played a vital role in the transformation of financial services, right from cryptocurrency storage and trading to online payment.
Blockchain has several underlying capabilities, the notable one being applying it for cross-border payments. Currently, international funds transfers tend to be quite expensive and protracted. But with blockchain technology, such issues can be addressed as it would increase the security and speed of international payments, and that too at a lower cost. Research suggests that almost 45% of people are already utilizing blockchain technology for making overseas fund transfers.
3. Credit Scoring and Embedded Digital Fingerprinting
Banks, online lenders, and other types of financial institutions require effective and efficient ways for analyzing their potential clients, loan applications, scam prevention, and getting the pre-loan approval process automated. These are time-consuming tasks and has a got the potential for high-margin error.
New fintech technologies like AI-driven credit scoring and digital fingerprint makes the process more cost-effective and faster. With digital fingerprinting, banking institutions can quickly get the key customer data directly from the website and feed the data into detailed customer reports and profiles.
This data can include everything right from the type of device used by the customer, their location, ISP, cell phone type, etc. Again, with smart credit scoring banking institutions can compile additional data like IP analysis, social media details, geodata, spending power prediction, income, etc more accurately and quickly and decide whether they can be trusted for offering credit amount or not.
4. Buy Now Pay Later (BNPL)
In recent years, the concept of ‘Buy Now Pay Later’ has become an online trend that allows customers to split their payments into EMIs. Although, the ‘Buy Now Pay Later’ services initially began with fashion brands but now banking and financial institutions are also exploring the same allowing customers to purchase goods through virtual cards.
Virtual cards are now at the forefront of the fintech revolution as it has helped in business expense management. These cards are now becoming increasingly popular because they are offering customers robust security measures to eliminate misuse by fraudsters and hackers. They are also reinventing ways how fintech companies handle expenses and financial transactions.
5. Payment Innovations
Fintech industry all these years have seen the latest advancements in payments technology. These include contactless payment, mobile payments, smart speaker systems, mobile wallets, identity verification technology, machine learning, and AI for security.
The biggest trend seen in payment innovation is the upsurge in the utilization of mobile payments during the Covid-19 pandemic. In fact, it is anticipated that Gen Zers will be a prominent driving factor for payment system disruption.
6. API Implementation
API stands for “application programming interface” that allows banks and other financial institutions to get their database services linked with external applications. It just works like a bridge except that it doesn’t require a middleman for sending confidential data. API implementation in banking and financial institution makes transparency and security better.
It keeps the data of the customers and banks secured and end-to-end encrypted. API banking has several benefits including improved efficiency, better financial savings, increased profit, shorter transaction processing time, and others. These are the reasons why API adoption is being widely adopted in the banking industry in recent years.
To sum up
Effectively leveraging technology in finance will help businesses to collect revenue faster, optimize cost and avoid making wrong investment choices. Banks and other financial institutions are now fine-tuning their strategies which implement driving wider adoption of automation in the banking sectors and financial institutions.
Even if you are not a part of the fintech industry, fintech will still have a profound impact on your business. The fintech trends we discussed will open up new opportunities for both customers and business leaders alike. It will ensure safer digital payments with complete standard compliance in the upcoming years.