5 financial technology (fintech) trends to watch for in 2021 and beyond

It has become frighteningly obvious that technology has overtaken humanity. Technological innovations, as well as advancements, are revolutionizing the entire world. Literally everything tends towards digitization. According to technology growth statistics, there are approximately 4.88 billion mobile phone users worldwide in January 2021. 62% of the world’s population owns mobile devices. People have been using mobile devices even for their financial transactions since after the pandemic outbreak.

Fintech Trends to Watch in 2021 and Beyond

Since the coronavirus hit, people are more prone to mobile payments and digital transactions. The purpose of this approach is to avoid physical contact, resulting in a tremendous evolution in the Fintech industry. More than 69 million people use mobile payment services. Not only this, but in the United States as well, mobile payments in stores are reaching $ 128 billion in 2021.

Financial technology is a breakthrough advancement that is gaining prominence around the world as it replaces traditional financial services in many sectors, including payments, wealth management, banking, e-commerce, social commerce, and much more.

Infrastructure-based technology in open platform and application programming interfaces is reshaping the future of the financial services industry as operational advancements provided by robotic process automation (RPA), distributed ledger technology (DLT), and chatbots offer sufficient precision, efficiency and agility. .

Revolutionary AI / ML algorithms, as well as blockchain technology, are influencing the fintech industry. Let’s put our eyes on some of the most changing fintech trends influencing financial infrastructures and this Earth.

Autonomous finance

Autonomous finance takes the burden off the client’s shoulders by automating the financial decision-making process with the acquisition of artificial intelligence algorithms. This technology helps clients make instant decisions regarding their finances, such as where to invest them, what to do with the overdraft account, or how to approve the loan with more favorable interest.

Automated financing initiated by robotic advisers related to mutual fund management and software-based financial planning. Growth-driven organizations expect an improved customer experience with autonomous finance.

In addition, growth-based companies believe that customers will benefit from increased financial well-being and proactive customer service, resulting in stabilization of the company and the development of a technical foundation with automated processes and digitized automation.

According to the study called “State of the connected customer”, 68% of customers have higher expectations of the digital capabilities of companies due to the pandemic. Still, only 27% have managed the pandemic effectively using their autonomous financial capabilities.

Therefore, analysts and researchers expect more advancements in autonomous finance over time in parallel with the advancement of cognitive technology.

Voice technology

AI-powered voice technology has advanced to be able to play songs or say weather forecasts, and this technology is playing a very promising role in improving finance-related tasks.

Evolving voice technology can transmit both infrequent transactions and frequent transactions, allowing users to redirect funds between accounts or transactions through platforms such as Monzo, PayPal, Pingit, Square Cash, etc.

The progression in voice technology is expected to evolve from 8% to 31% by 2022. Furthermore, it is estimated that robo-advisors are capable of managing an incredible 2 trillion dollars in assets.

Integrable infrastructure

Embedded finance is the fastest evolving market, and companies today are integrating pre-built fintech solutions into their software through the latest APIs. It is an impeccable combination of transforming financial services into non-financial services. Companies are rapidly collaborating with companies that offer financial services. The integrated financial infrastructure effectively reduces obstacles for online platforms to provide financial services to their clients.

It empowers companies in the MSME, B2C, and B2B segments to vastly increase customer engagement, legitimize the customer base, and help scale their product offerings. According to recent studies, it is said to be a market of over $ 7 trillion. However, as it grows with the speed of light, researchers estimate that it will generate total revenue of $ 230 billion by 2025 in the United States alone.

Open Banking

By combining banks and Fintech, open banking enables the creation of data networks between financial infrastructures. The second payment services directive (PSD2) emphasizes that financial institutions disclose your information in a secure and standardized way. Open Baking allows users to share their information effectively, efficiently with ease, flexibility, and security. Reaching approximately 7.2 billion, the open banking sector has managed to quadruple in value in just one year.

In 2019, open banking generated an income of $ 7.29 billion, and it is estimated that it will exceed the figure of $ 43.15 billion by the year 2026. Financial infrastructures require Fintech, and Fintech needs credit unions and banks. community. Open banking associations can offer clients a consolidated view of their bank accounts for efficient and effortless management.

Machine learning and artificial intelligence

Private actors and public sector initiatives have allowed users access to financial data such as cash flow or payroll. Organizations today are analyzing this information with the help of revolutionary artificial intelligence algorithms and the latest machine learning techniques. For detailed information on business metrics and customer behavior.

Predictive capabilities prove to be a game changer for any business, but such capabilities are very beneficial in the financial industry. These capabilities play a fundamental role in improving financial infrastructure security protocols. According to studies, machine learning and artificial intelligence in Fintech were worth nearly $ 8 billion in 2020. However, researchers estimate that these advances will exceed $ 26 billion by 2026.

Conclusion: What is coming?

Given this trajectory, it is very clear that progress in financial technology or Fintech will not stop anytime soon. Furthermore, this evolution will continue to be immensely embedded in almost every aspect of the digital tools that we use regularly.

Fintech will continue to make financial services accurate and efficient with effortless access to them. Considering the tremendous evolution in the fintech industry, the global fintech market is expected to reach a market value of almost $ 324 billion by 2026, growing at a CAGR of approximately 23.41% between 2021 and 2026.

Therefore, the progression in the fintech industry will be found simultaneously with the development of integrated infrastructure. Furthermore, the evolution of financial technology is being found due to the acquisition of revolutionary algorithms of artificial intelligence and machine learning. The evolution of financial technology occurs due to the efforts of organizations that merge these forces to develop a broader base. That broader base unlocks financial access to the new generation of users and drives innovation at a breakneck pace.

Image credit: burak kebapci; pexels; Thank you!

Aliha tanveer

Aliha tanveer

Technical content writer who loves to jot down her thoughts and ideas in the best possible light. Take advantage of computer science expertise to write for highly technical audiences.


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