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Technological advancements leave no industries behind when it comes to the adaptation of new technologies and innovative improvements. Although disruptive at first, new technology has the tendency to transform industries for the better. The fact that new technology quickly finds its way into every industry proves that even the finance sector is not left unattended. Each year, financial experts are looking forward to new technological trends that will have a significant impact on their industry.
Nowadays, financial technology, otherwise known as Fintech, is vastly improving alongside technology’s advancements. Devices, interfaces and software, among other things, are being widely adopted across the financial sector, in order to improve the efficiency of entire processes, as well as provide more convenience to consumers and institutions. The fact of the matter is that it’s estimated that the financial sector will experience more changes in the next ten years than it did for the previous hundred years. That being said, here are a few Fintech trends that are transforming the financial industry.
Going mobile
Mobile devices have grown both in popularity and in usage over the past decade. Nowadays, mobile traffic is dominating with 52.2% of all global Internet traffic originating from mobile devices. This behavior has given birth to a new trend that’s becoming widely adopted in the finance sector and that is going mobile. Even though the majority of consumers still prefer to do dealings with a bank in a physical branch, the number of consumers who use mobile banking and other financial services is on the rise.
People still mostly leverage desktops to perform online banking instead mobile devices, with 20% using the desktop while 15% are using a mobile device, but it’s estimated that this trend will change in the future. As a matter of fact, predictions state that 88% of all banking interactions will be mobile by 2022. This will also cause more Fintech solutions to arise, such as digital-only banks and various applications for financial services.
Artificial intelligence (AI)
New technologies continue to disrupt and improve various industries. Artificial intelligence (AI) has generated a lot of buzz around itself. Although still in the development stage, AI has already found its way into the financial sector. In fact, it’s estimated that around 20% of financial institutions are already leveraging AI technology. What’s more, 41% of financial companies are planning on implementing AI tech within the next year. AI’s machine learning, deep learning and natural language recognition capabilities have the potential to revolutionize the finance industry.
From financial data automation and analysis to using AI-powered legal transcription services to improve the speed and the efficiency of communication, as well as financial deals, AI is already making a huge impact on the financial industry. AI’s contribution to the Fintech can be seen as a way to automate mundane tasks, improve the customer service with features such as chatbots, provide financial advice through virtual assistance and improve security by detecting frauds and preventing cyber attacks.
Blockchain technology
With the rise of cryptocurrencies and the blockchain technology behind the concept back in 2009, the financial sector has been experiencing vast changes. As a matter of fact, the financial sector is the first industry that really explores the possibilities and the potential behind the blockchain technology. Even though this technology was originally intended to decentralize transactions from banks and their regulations, it’s the banks that are considering using this technology nowadays.
That being said, around 90% of banks are exploring the blockchain technology’s implementation while it’s estimated that 65% of banks will use this technology in 2019. The fact that blockchain technology is revolutionizing both the Fintech and the financial sector entirely can be seen in many new Fintech startups that leverage blockchain technology. One of the main benefits of using this tech is that financial institutions can now leverage a digital ledger to store records and transactions in real-time while also reducing the amount of paperwork and human error in the process.
Biometrics
The finance sector is experiencing ongoing cyber attacks in today’s digital world. This created a sense of urgency for improving security measures that will protect both consumers and financial institutions from such attacks. So far, the PINs and passwords were the top security measure consumers have been using. However, it seems that’s about to change. As a matter of fact, many financial institutions have started using biometric scans to improve security and prevent both fraud and hacking attempts.
Consumers are also seeing the implementation of this technology as an improvement to previous efforts. In fact, 78% of consumers believe that biometric authentications are more secure. What’s more, 86% of consumers believe logging into apps is easier with biometric scans while 84% claim it’s faster than using a password. In addition, 42% of consumers stated that they wouldn’t use a banking app if it doesn’t contain biometric authentication.
Fintech trends are experiencing both changes and improvements thanks to modern technology. The entire financial sector, in fact, is about to go through some serious changes due to new technology adaptation. It’s safe to say that in a few years from now, the financial industry will look nothing like today.