“By embracing openness, driving organizational agility, and making smart bets in technology, disruption can and will be positive to the winners in the payments marketplace,” says Joel Van Arsdale, Managing Director Europe, First Annapolis.
His comment is spot-on as financial services have become more accessible with continuing influence. Only those who are raring to go will reap the higher benefits.
Because whether we like it or not, FinTech is revolutionizing the way things are from payments to lending and things in between. If you don't have any idea what FinTech is, check this video to give you a background:
FinTech’s impact is notable for faster processing of complex transactions, better financial inclusion, and lower error rate on accounting.
While in 2018, nearly 80% of top executives feared that their firms were at risk of disruption and displacement from highly agile, data-driven competitors in a 2018 executive survey, there are institutions who have already responded and found solutions.
In this age of rapid change, the call of the times is to be able to evolve.
While there are challenges and initiatives being created and recreated, this year, there are trends to see and you should be able to set your place in this particular disruption.
With that, check out these 8 FinTech trends to look forward to in 2019.
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Interactive Banking Experience
Banking experience has not only become more accessible, but it definitely has become more interactive than we could only imagine. I have shopped, paid and constantly get updated about my account without the need of having to go to the bank or even talk to someone from the bank.
Whenever I can’t withdraw money from ATM machines usually due to long lines or offline status, I have the option to either use my debit or credit card.
Multi-experience means connecting with your bank through various channels and where you can choose which one you are most comfortable with. These are through apps, web, digital voice assistants, smart speakers, and more.
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Smart Banking Channels
Loaning from banks in the past is not that easy. There are requirements that you need to produce before your request gets an approval.
Today, it has become as easy as receiving a text or email from your bank saying you are provided credit to a certain amount and can readily acquire it by just replying to their text message.
This is how banks now respond to their customers and these are possible with knowing their customers spending patterns for example.
Banking channels such as ATMs, mobile banking, Internet banking, phone banking, etc. will become more tailored to adapt intelligently to deliver a more personalized contextual experience for users.
Since the success of banks will depend on their customer base, they will be studying customer patterns and behaviors. This will help banks personalize the interface to suit specific user preferences.
AI systems have been used for detecting fraudulent activity or money laundering. This helps alleviated time pressures on investigators and concentrate instead on investigating each case in more detail.
Smart banking has now embraced Artificial Intelligence and has produced a number of cognitive technologies. The individual technologies are getting better at performing specific tasks that only humans used to be able to do.
This automation process, when streamlined operates at a 100% quality rate, it saves cost and improves turn around time and accuracy.
As long as there is manual and repetitive work being done in companies, there is a place for AI in banking. As it is a growing trend, to have it is not a matter of ‘if’ it is a matter of ‘when.’
Image Credit: Pexels
Voice User Interface Banking
Director of Compliance at Devbridge Group Ed Price says, “Many experts are convinced voice will be the dominant user experience in the next year or two. By 2020, 50 percent of all web searches will be voice generated.
Companies must begin to support a voice-first approach or get left behind. They also need to do more than just optimize for sound-driven search. Voice user interface (VUI) improves customer engagement, conversions, and insights.”
Add to that, according to Google, voice is already used in 20% of all searches. This makes voice recognition technology not only gaining popularity but make more consumers shifting towards it.
Voice technology’s rise to popularity was anticipated from the introduction of virtual personal assistants such as Siri, Cortana, and Google Assistant, as well as smart speakers from Amazon Echo, Google Home, and Apple HomePod.
Sooner or later, just as Internet technology has invaded our lifestyles, this voice technology will become a preferred mode in banking.
Corporate on-boarding or client onboarding is the process a bank undertakes when bringing a new business customer onboard. Onboarding new clients involve gathering vital information about the customer and conducting identity checks to comply with regulations.
This process will allow a customer to open an account with the bank once all necessary documentation and requirements are met.
Traditionally, this process would take several weeks for banking as it involves multiple forms, paper files, and compliance checks. The trend is changing though, my very own experience even several years back took me only a day or at most two and then I go home with a newly opened account.
The real challenge of corporate onboarding for banking is providing a good customer experience whilst meeting compliance requirements and operating efficiently.
This is still a challenge since almost always even my favorite bank has its customer service always making me wait in line. Transforming this particular process would surely give a competitive edge.
Open banking has shared financial information available with multiple financial institutions/service providers.
It is an approach that uses open APIs to enable third-party developers to build applications and services around the financial institution, resulting in greater financial transparency for account holders ranging from open data to private data.
In India, UPI or the unified payment services powers multiple bank accounts under one umbrella and open up the system to the third party solution providers.
This makes it a very simple at the same time secure process enabling a delightful customer experience.
In 2019, it should open the door for easier comparison of services, thus promoting healthy competition. Leaders will get a better view of consumers’ financial conditions, usage pattern, and financial behavior.
It will also add benefit to small businesses as they can easily be assessed for a business loan or a credit line. Further, it will gain more traction in many more countries and economic regions.
Cloud-based banking is the delivery of computing services such as servers, storage, databases, networking, software, analytics, and more over the Internet – ‘the cloud.’ In July 2016, Bloomberg reported that at least 25 of the world’s 38 largest financial institutions and insurance companies had signed up with Microsoft to begin putting applications into the cloud.
Financial service providers of all shapes and sizes thrive in today’s rapidly-changing market with the benefits of cloud computing as it reduces costs, it is easily scalable, improved efficiency, flexible, and enables new generation services.
Another reason for using cloud computing and for it to become dominant is that it makes it much easier to manage and analyze ‘big data.’
In 2019, some core services of banks will also move to the cloud, and this will include payments, remittances, credit scoring, account billing, and more.
Privacy is another critical concern and is the utmost priority. The growing FinTech, while gaining support, also attracts a lot of negative attention.
Customers need to feel their information will be used to benefit them and not intrude upon their private lives. Cyber risk is still on the list of leading issues for banks and regulators.
While there are privacy regulations, banks and financial institutions need strong operational controls in place.
Last year in the Philippines, banks have started issuing EMV chip-based cards, which secure the payment transactions with enhanced functionalities in authentication, verification, and authorization.
This means hacking accounts would become much harder and fraud would be next to impossible. Logging in becomes easier and faster. It also enables behavioral unique markers and algorithmically can be used to secure.
How banks handle sensitive data is an issue that will define the direction of the industry and banks should be prepared for those changes.
These trends are just the tip of the iceberg. FinTech is growing worldwide and everyone is experiencing it. You too can benefit from FinTech as you embark on another year as a freelancer. Go for the gold! And learn the best payment gateway for freelancers.
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