Of all the countries in this world, India is the fastest growing country in terms of the FinTech industry. Since its introduction, people are adapting to this industry at a growing pace. It has the way of payment and other financial services very easy, fast, safe and secure.
Before I talk about the impact of the current trends on the FinTech industry, let me first explain to you what the FinTech industry is and everything about this system.
What is fintech?
Also known as financial technology, FinTech refers to the amalgamation of Finance and Technology into one. In other words, the use of technology to provide financial services to the customers/users/customers is called FinTech. It simplifies and improves the work of companies, organizations and business owners to efficiently manage all their financial transactions using specialized software and algorithms.
Examples of FinTech companies include Stripe, PayPal, Paytm, RazorPay, PineLabs, and many more. The fintech sector also includes open banking, mobile payments, crowdfunding, stock trading, online financing, insurance and many other financial services.
Statistics on the fintech industry
The FinTech industry was introduced in the 21st century and has grown tremendously since then. The demand for financial services through technology has skyrocketed. Here are a few statistics about the FinTech industry.
- A report from Statista states that in 2018, about 70% of senior bank executives said partnering with FinTechs to develop a new service with them was a critical opportunity for the banks and banking industry.
- In 2020, Stripe was the most valuable fintech company in the US, with a net worth of $22.5 billion.
- Digital banking services are rapidly acquiring the market and 46% of people are using these digital channels for their financial needs.
- According to a report by the Business Research Company, the global financial services market is estimated to reach $26.5 trillion by 2022.
- Statista states that the global consumer adoption rate of fintech for money transfers and payments is 75%.
More about the fintech industry
Fintech is not only limited to making financial transactions, but also includes the development of cryptocurrencies such as Bitcoin. Businesses’ digital transformation has exploded, giving way to banks and merchants to leverage the technology and provide better services to their customers and consumers.
6 tips for a successful investment journey
People prefer to use traditional banking services over the modern banking system because they want their data safe and secure, where cyber attacks are so common today.
Fintech Development Trends
When entering the FinTech industry, you need to be aware of the trends that have taken over the industry and that every institution is adopting to skyrocket their ROI. If you want to be an unbeatable market giant, you need to be aware of all the market trends and technologies. Here are a few updates and trends that the FinTech industry is tracking to help you with your questions and requirements.
- Blockchain technology – We are all aware of the fact that blockchain technology is immutable, decentralized and secure in nature. This is where it adds a bonus point for the FinTech industry because here where the data is very important it is also important to keep that data safe. This will help the companies gain the trust of the consumers and also prevent data destruction and data breaches.
- AI integration – Artificial intelligence is now one of the trends that has increased the ROI of these FinTech companies. While artificial intelligence has boosted sales, the ability that sets it apart in the market is its ability to provide each customer with personalized recommendations accordingly. Speaking of how AI is helping the FinTech industry is that it lets these major industry giants calculate their credit scores, make suggestions regarding loans and business transactions, so mistakes don’t happen.
- Big data analytics – Big Data, commonly referred to as the type of structured and unstructured data that financial institutions use to identify and easily manage fraud and risk. With the use of Big Data in the Fintech industry, one can easily predict the fraudsters that no human eye can and avoid all risks. It is also used to understand human behavior and create strategies accordingly that benefit both businesses and consumers.
- Smart Cyber Security – In this digital age where cyber-attacks are very common and hackers steal and sell data, cybersecurity is an essential factor to take care of. For financial companies where data is the most valuable asset, it is important to secure it and keep it safe, implementing security and encryption is very important. These companies have now focused mainly on investments in cybersecurity to prevent money laundering and identity theft. This will result in greater security and stability in the customer’s personal information and money vault.
- Biometric Identification – According to a report by Statista, the number of mobile banking users is predicted to increase steadily between 2020 and 2024 and is expected to reach nearly one billion by 2024. And by 2020, nearly 1.9 billion people worldwide will actively use online banking with growth expected to reach 2.5 billion by 2024. With the growing statistics of mobile banking users and the adoption of online banking systems, it is also important to secure consumer identities. This means that these banking systems must adopt biometric authentication and facial recognition to prevent unauthorized access and prevent data breaches in this sector, which also prevents money theft and money laundering.
Impact of current trends in the fintech industry
The adoption and implementation of the trends in the fintech industry is an added benefit for both parties. The services that the financial sector provides offline can be improved with the implementation of these trends and technologies.
How are companies a good fit for timesheet software?
- The elimination of intermediaries in blockchain technology enables peer-to-peer and decentralized transactions. It helps in making faster and more secure transactions along with the settlements done in seconds.
- The implementation of technology in the financial sector will help reduce costs, risk and fraud.
- The merger of finance and technology has accelerated the KYC and verification process, which was previously time-consuming.
- It has also increased the chances of seizing new opportunities and introducing new and updated banking models to the sector, with better asset management techniques.
- The FinTech sector has also made the loan approval and distribution process easier and made the analysis and calculation of credit score effortless for its clients.
The only negative impact that the FinTech sector can have is the risk of data and asset loss, which can be protected through the correct use and implementation of the technology.
Investments in FinTech are expected to reach a whole new level in 2022, from $127.66 billion to $309.95 billion, which is an important milestone for this sector.
FinTech has been in the spotlight in recent years and companies are positively investing in digitizing their offline businesses as it has made things easily accessible and manageable. Most importantly, in the industry where security factors such as personal information and safeguarding money are very important, it has also enabled the companies to gain the trust of the consumers.
Always enjoys writing about technical insights, ranking algorithms, operational behavior, data analytics tools, emerging technology trends, AI-based commuting, robots, web applications, CRM and digital transformation IT solutions.