The recent years have brought about an increase in the pace of the advancement of the technology and this trend has been closely followed by a growth in customers’ expectations. This makes the business world highly competitive and yesterday’s remarkable discoveries and solutions go from a competitive advantage to tomorrow’s mandatory element of success.
The financial industry has seen its share of changes and it is safe to say that trends in the Fintech sector have a substantial influence on the entire industry. The unique combination of the world of finance and technology has granted the Fintech sector a great power to create cutting-edge innovations whose implementation can make all the difference to a company climbing the ladder of success. For that reason, let’s take a look at the trends in the Fintech sector we can expect in 2020.
The versatile application of AI technology
Artificial intelligence (AI) continues to prove itself useful in numerous industries, including fintech. Analyzing numerous cases allows AI to notice patterns, report mistakes, and expedite processes by decreasing chances for errors. In terms of the financial section in 2020, this strategy will be applied to predict possible frauds and fraudulent financial institutions.
In addition to that, AI-based software is a great tool for risk management because going through a company’s operations and observing patterns can help prevent potentially threatening courses of action. Also, the customer service department of any financial institution can benefit from AI analyzing customer data with the aim of improving customer experience. AI still has a lot of potential which mostly lies in the domain of data analysis and management and this is what attracts investors.
Blockchain and cryptocurrency spreading their influence
When Bitcoin first appeared in 2009, it caused a lot of commotion. The idea of a decentralized currency which isn’t controlled by any financial institution was and still is attractive for many people. Until this day, it has given an opportunity to any individual regardless of their financial background to use powerful bitcoin mining hardware for solving complex mathematical problems (i.e. mining). By doing so, that individual is rewarded with a fraction of Bitcoin and other cryptocurrencies, depending on the algorithm.
While cryptocurrencies are slowly becoming common payment methods for different products and services, the blockchain has proved itself to be an incredible aid to the financial sector due to its innate system that prevents fraud. Assigning each customer with a unique identifier makes playing tricks on the system almost impossible because it acts as a digital fingerprint. In 2020, we will see more businesses and brands embracing cryptocurrencies and banking systems considering blockchain technology.
The role of regulatory technology
The idea behind RegTech is to use technology to manage regulatory processes within the financial industry. It embraces monitoring, reporting and compliance and the technology in question is cloud-based, and this all helps financial institutions and financial sectors of businesses comply with regulations without breaking the bank.
Different RegTech solutions monitor online transactions and search for signs of irregularities. Taking note of these potential dangers on time decreases the risks and costs that would have otherwise occurred and this is why RegTech companies collaborate with financial institutions and regulatory bodies. Having in mind the fast-paced development of digital products and services, threats such as data breaches and money laundering will further entice RegTech’s popularity in 2020.
Conversational banking, the element of the future
Modern-day people have little time to lose and most of the time, there is pressure to finish our tasks even before they are presented to us. This is why we started doing everything while on the move, from shopping while we are commuting to work, to arranging meetings while waiting for our doctor’s appointment. Being overwhelmed with information on a daily basis, we started appreciating being given the exact information precisely when we asked for it.
There are so many pieces of information that can and should be automated. Inquiries such as a lost password, regaining access to an account or reporting a stolen or lost card are of immense importance and a source of great frustration for many people. In the future, chatbots will be in charge of all of them, including the process of registration, taking out a loan, and making a transaction. As financial advisors, they will also keep track of customers’ expenses and taxes.
The world of finances and business in general is changing even faster than it used to and remaining at the top of the game can be quite challenging. On one side, businesses need to embrace certain practices in order to survive and thrive, while on the other side, some of those maneuvers can put their data and procedures at risk.
This is why solutions such as implementing AI and different regulatory tools can greatly contribute to the prevention of fraudulent activities in the financial sector, which would make daily transactions of any kind safer. Implementing blockchain technology can further strengthen the security of transactions, while conversational banking will provide customers the answers quickly and efficiently, just as the modern digital generations prefer.