The fintech sector is still in its infancy and a lot is happening in the fintech space.
When people started using internet banking or phone banking in the last decade, they hardly knew that the world was fast entering the era of fintech! The combination of money with technology has worked wonders to make financial services more efficient and accessible to all. Today people can buy things, make payments, apply for loans, crowd-fund, invest and withdraw money, get banking services; Everyone sits in their room digitally. AI and machine learning banks and other financial decisions are helping consumers determine their creditworthiness and make financial decisions. It may all seem great; However, the fintech sector is still in its infancy and a lot is happening in the fintech space. Innovation and experimentation are constantly happening. In the next paragraph, we will examine some of the expected trends in the fintech sector in the current decade.
Only the rise of digital banking
Most banks are currently using digital technology to provide their services. Services like account opening, payment gateway, loan application, video KYC etc. are already being provided digitally; However, banks still have their physical presence. Fintech is ready to change that. In the next decade, we will see the rise of banks without any physical presence. They will provide virtually all their services with the help of digital technology.
Similarly, open banking will also start in India. Opening banking already exists in Europe, but its origins in India have not yet been found.
Voice technology, AI and machine learning
The role of AI and ML will become even more important. AI and ML will find their application almost everywhere, be it data analysis, customer support, trend analysis, credit rating or anything else. Voice technology will also play an important role in the search, verification and demand for online fintech services.
Improved cyber security
Everything connected to the Internet is vulnerable to cyber threats. Since Fintech works with money, it is a very lucrative way for cyber criminals. The next decade, as Fintech grows, the sector will see huge investments in cyber security. Biometrics will be the main mode of verification and cyber security in Fintech. Network-level analysis will become crucial in preventing fraud.
Currently, the Fintech market space is made up of a myriad of players, large and small. In the near future, larger financial corporations may acquire smaller players with stronger technical backgrounds. That way, the bigger players don’t have to rediscover the wheel and they will integrate the smaller players’ technical capabilities to deliver their services to their larger customer base. To deal with big players with technical ability, two or smaller players can come together and become important players in the market.
The government can formulate a stronger policy
As fintech companies begin to dominate the finance sector, the government will take action and begin to prepare a formal regulatory framework. Until now, the government has been rather soft on the fintech sector in terms of regulations.
Buy now and pay later
‘Buy now and pay later’ will become a very important factor in the market. This is one step beyond the traditional credit card. It will have the benefit of a credit card at no cost. Some players have already started offering this service and it is expected to be the next big thing in the fintech space.
The rise of cryptocurrency
Cryptocurrency is already a major player in the fintech market; However, it has not yet realized its true potential. A large portion of investors are still skeptical of cryptocurrency. However, it is expected that in the next few years, cryptocurrency will take the market by storm and become a preferred option for many investors.