Last Updated on January 13, 2024 by Umer Malik
Before the advent of the Corona Virus pandemic, it’s possible that many people did not realize how much digital banking and the FinTech industry needed to advance. However, with the Covid-19 pandemic in the picture, the financial industry has skyrocketed in development and moves. The industry is now utilizing the technology better like never before. The use of technology has seen the industry taking drastic steps to improve its services and be in tandem with the dynamic FinTech needs. Such has led to major steps in the industry, translating to revenue despite the pandemic. Being in the financial industry, you may be wondering what some of the new trends are. Keep reading to know what to keep looking up to in 2021 when it comes to FinTech trends.
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One of the financial trends that has been there and will keep sticking around is the technology called Micro-services. Without Micro-services, the FinTech industry would not make it to where it is. Micro-services are like the bridging factor between the traditional financial services and the dynamic systems we have today. When it comes to being ahead of other financial services, Micro-services have been of great help. This owes to the fact that Micro-services equip FinTech services with the needed flexibility it needs to be at par with the business dynamics. How so? For any business to stay ahead of others in this era of digital transformation, agility is needed. This is a company’s unique ability to be adaptable to any changes that may come in unexpectedly. Agile companies and businesses make nonetheless when dynamics arise. And since the FinTech industry has been utilizing Micro-services, it’s quite adaptable and agile, giving it an advantage over the others. Micro-services are not going to phase out any time soon. Rather, they are just going to get better for FinTech and related services.
Artificial Intelligence (AI) and Machine Learning (ML)
Artificial Intelligence and Machine Learning is another technology that is not going to phase out any soon. Rather, the FinTech industry is applying it and will keep applying it at improved levels this year. Many industries, including digital marketing services, have now applied AI and ML technologies with the achievement of many benefits to the industries. They now boast of reputational benefits and improved revenues. Data scalability is a key need for any industry that wants to make it to higher levels, and AI/ML systems ensure this. Forensic services and the related industries have used ML/AI technology to keep accurate data and records. Even robotic services are now using AI/ML services to respond to customer prompts, monitor customer behavior, and adjust to the needs as they roll in. Should the FinTech industry embrace AI/ML systems, the industry will certainly achieve and enjoy financial milestones.
Decentralization in finances
One of the key strategies that many financial services are employing to get out of stereotype that the financial industry faces is the decentralization of finances. Through this, companies manage to win favor and repurpose their activities to create out-of-the-box solutions which are practical for their customers. Besides, decentralized financing is a creative way of revolutionizing financial operations for the ultimate benefit of the company in question. Although intermediaries are sometimes good for banking and financial services, they can be burdensome. Using decentralization in financing, financial organizations now find it possible to get rid of all the unnecessary intermediaries and create room for availing finances to the majority who might not be accessing finances at the moment but need it. FinTech services are now using blockchain networks for seamless transactions and to get out of the rigid boundaries of the financial framework. Payment and investments which could be unnecessary to the layman are now eliminated to free funds which are now democratized to other areas that need the finances even more.
One of the applications of science in the financial industry that FinTech app development is now applying in 2021 is predictive analytics. Predictive analytics technology is becoming more necessary today since fraud cases are on the rise and the FinTech industry is one of the major targets and victims. Predictive analytics create foolproof means to fight and back off fraudsters and keep cybersecurity real. Predictive analytics combines various technologies, including big data technology and machine learning systems, to predict the outcome and the future with great precision using data on customer behavior. Besides, predictive analytics systems have been instrumental and determining which business moves to take and which ones to ignore depending on what the algorithms detect. The organizations that are already applying predictive analytics are reaping fruits when they receive efficient and cost-friendly results that keep them tuned in the industry. Because clients are at the core of any business, satisfying them is a matter of utmost importance. And even for this, predictive analytics systems have proved beneficial. They help financial companies design ways to improve customer experience and incorporate their contributions to add value to the services.
FinTech industry facing a shift in health towards a political outlook
Another trend that will surely surface before the year ends is the shift in financial health towards a political perspective. 2020 was not just a good year for our economies. Of course, this did not go unnoticed by the political leaders. Seems like this year will see many political figures taking a stand in the FinTech industry. The low-income customers had their enough share of difficulties in 2021 when they could barely make a living. The big political figures now want to turn to them (hopefully with no malice) to improve their conditions and take the financial services to another level. There is a possibility that the governments and the financial sectors are going to work together to give rise to FinTech products that will provide for everyone, including the disadvantaged low-income customer. Economic challenges, too, are on the rise, and the Fintech industry will have to accept and endorse political input to solve some of these challenges.
Since the Covid-19 pandemic struck in 2019, the FinTech industry has faced many challenges, just like any industry. As time advances and the pandemic keeps staying with us, new trends surface in the FinTech industry. This article has looked at these trends, including AI/ML systems, Micro-services, Decentralized financing, Predictive analytics, and the FinTech industry incorporating political input.