Are you wondering about what the latest fintech trends are? If you’re a forward-looking business then now is the time to start thinking about how you can get involved with the fintech revolution that is changing finance for the better.
Here’s everything you need to know about fintech trends 2020 and how you can prepare your business.
What Is Fintech?
Fintech or financial technology, sometimes called neo banks or digital banks, are a new type of bank and technology that started life in the U.K. They don’t have physical branches and they operate across borders in multiple currencies.
Some examples include Monzo, Revolut, and Transferwise. Over the past few years, all of them have developed unique features that make traveling abroad and living as a digital nomad a lot easier.
Revolut offers the ability to move your money into multiple currencies. You can open a balance in any currency from Thai Bhat, Hong Kong Dollars, to British Pounds.
When you travel to that country you simply move your money across at the current exchange rate and your spending happens in those local currencies. There are no fees for moving money from one currency to another.
Different Fintech Banks With Unique Products
Transferwise allowed you to receive transactions in U.S Dollars, Australian Dollars, Euros, and a host of other currencies from around the world with local bank details. If you have a friend who owes you money in the U.S they can now pay you back at no cost for them.
Equally, Transferwise makes it easier to send and receive money abroad for a cheap price. You can send money to foreign bank accounts and it will usually arrive within a few hours.
All of these accounts have their own colorful debit cards with low transaction rates and no fees for spending in foreign currencies.
Direct Debit Integration
One of the latest trends in fintech is direct debit integration. This means if you have a bank account in a foreign currency you can now set up direct debits in those countries. Imagine if you discover that it’s cheaper to buy something in the U.S than it is in the U.K or visa-versa.
With direct debit details, you can have the money taken from your account every week or every month from your foreign currency account with no fees. For the first time, you are now able to shop around with no national barriers and are able to secure the best deal for you.
This also means services such as Paypal are now integrated into Tranferwise with a direct debit. So if you are paid in U.S dollars or a different currency over Paypal you can now send this on to your bank account with no fees from Paypal.
This brings fintech another step closer to becoming a global bank that works in the same way as any normal bank works and brings it a step closer to tearing down those barriers.
Fintech and the Blockchain
Fintech now also allows users to purchase and store crypto money in the blockchain for a fee. The blockchain is a decentralized way of sending cryptocurrency around without fear of it being frozen by the bank or the government.
It is not regulated by a central bank or a financial institution nor is it centralized so until now it has largely been the currency of choice of people with technical and financial know-how. It has also been used by criminals using the dark web to buy drugs on sites like the Silk Road and commit other crimes.
Now cryptocurrency has been adopted by some fintech startups like Revolut it is becoming more mainstream and many people are putting their money into cryptocurrencies.
As cryptocurrencies grow the computer program on which it’s based – the blockchain – also grows. Many fintech companies are looking at how they can utilize this for their own gain such as developing social media platforms and medical programs.
Try reaching out to this fintech network if you are interested in learning more about fintech and the blockchain.
Regulation Is Getting Easier
In the past regulation for the banking industry was very high. If you wanted to start a new bank you’d need hundreds of millions of dollars and the backing of high profile people in Congress on Wall Street to make it happen.
Fintech banks pushed back against this regulation finding ways around this while they grew and applied for banking licenses. Many of them started off as simply a paid card that cold hold credit with a chip and pin.
Now the banking community and the government have largely allowed them in the door. Banks now have banking licenses in multiple countries so that their customer’s money is protected. They have circumnavigated the rules so that customers who don’t live in the U.S can open a U.S bank account.
Rather than just being startups, companies like Monzo, Transferwise, and Revolut are trusted and respected brands.
Fintech Trends: 2020 Is a Good Year for Fintech
2020 is set to be a good year for Fintech. After years of fighting for brand awareness and recognition as well as regulation change, new digital banks are growing day-by-day.
New features like direct debit integration are stripping away the previous limitations. Having a fintech account is more like having a global bank account and so on, as people yearn to travel at the end of the pandemic, everyone will want one.
Regulation is getting easier with each day as restrictions on banking licenses are eased.
If you want to learn more about fintech trends in 2020 then be sure to check out the rest of our site.