Here are 5 trends shaping the future of the Financial Technology (FinTech) industry.
- Invisible Payments
- Consumer Education
- Multi-Service Platform
- Blockchain and Big Data
- Localization and Regulations
The fintech industry is reassessing itself at every level. New moves and continued initiatives are accounted for and closely monitored by both customers and regulators. Fintech companies are at the forefront with digital transactions taking place at a higher rate than ever before.
The Indian fintech market, with an eighty-seven percent (87%) adoption rate is one of the leading and fastest growing markets compared to an average global adoption rate of sixty-four percent (64%). India’s fintech CAGR is expected to expand 23% from 2020 to 2025, growing from $26 Billion today to $83 Billion in 2025.
The demand for cashless and contact-less transactions in this pandemic-hit economy is expected to create more opportunities for digital wallet operators. Invisible payments take physical payment methods such as cash, debit and credit cards, completely out of the equation—creating a convenient and speedy experience. Digitally linked transactions will not just help to boost efficiency but will also increase data collection in the fintech industry. This data can then be used to offer new services. Thereby, creating new revenue streams, providing unbundled offers, and building cost-effective set-ups for businesses to grow.
As more customers get on the digital board, the fintech industry will have to focus on building trust and consumer engagement. This is especially true in a time digital data is vulnerable and cybersecurity is of the utmost importance. To be critical and to stay ahead of the competition than other fintech brands, it is necessary to focus on the security along with making the procedure simple for consumers. Communication is one of the major ways to drive engagement with consumers. While the digital payment process might not be new for some consumer segments, it is a new process for many consumers and customers. Thus, it becomes the brand’s responsibility to build transparency in communication and make the consumers aware of all the activities in a simple way, so they can understand fraudulent activities beforehand.
Communication also includes giving consumers regular updates, sharing clear information with regards to change of policy, polite customer service and so on. The Indian fintech industry should also consider going regional to connect with a growing market of consumers. The more individual consumers use technology to their advantage, the stronger firms will build brand equity and in doing so survive challenging pandemic times.
Consumers demand multiple services across one platform. Many Fintech brands have already rolled out offerings with multiple services across one app. Increasing offerings of robust solutions through powerful API integrations will further expand the fintech industry range of solutions. In the coming days, consumers who need banking services are likely to turn to those financial players, who can offer convenience and ease of transactions that is entirely safe and secure. To address these consumer needs, banks cannot do much, but technology can go far towards digitizing consumer demand.
Blockchain and Big Data
Blockchain and Big Data are two technologies in full swing, but they are also two complementary technologies. According to experts, brands adopting burgeoning blockchain technology will benefit the most. Financial services will be able to reduce fraudulent activities, phishing attacks and ensure secure payments. One of the other things that Fintech needs to bring their attention to is—Artificial Intelligence, Machine Learning and Data Analytics. As all these can help financial services in addressing their key challenges like cost reduction and scrutinize risky transactions. A
This will help financial services to get a better hold on their offerings, reduce fraud, automate trading processes, ensure secure payment processing and so on. The other thing, Fintech brands need to bring their attention more closely to is—Data Analytics, AI and Machine Learning. AI is already helping many address key pressure points, reduce costs and monitor risks on transactions. According to Autonomous, a financial research firm, “AI is projected to reduce operating costs by 22 percent (22%) in 2030.
Localization and Regulations
Fintech has always been known for their coming of age technology owning towards offering the most convenient and flexible options for consumers. It is not surprising that going forward, financial services will offer a customized and local offering to their customers using data analytics. The more advanced technologies that financial services adapt to upgrade their strategies, the more growth in the fintech industry is guaranteed. This is just the beginning of a huge fintech industry in the upcoming days. The Reserve Bank of India is rapidly adopting the trends as well, by implementing policies to monitor industry more closely. The analytical tools are helping regulators to compare scenarios to avoid potential risks and market-related problems.
As the needs and demands for financial transactions are increasing, payments and the banking industry have been evolving also continuously. The best kind of consumer experience and quick responses to regulatory changes will matter the most. Now, it is only a matter of time to see how high the fintech market will continue to grow and at what scale.