The fintech industry is fast gaining grounds as the days roll by, and we may soon experience a complete shift in financial service methods- from the inconvenient and time wasting trends to the innovative technological routes characterized by high speed, and an unwavering efficiency. This is because the FinTech industry seems to be beaming with new activities that are geared towards improving the world’s financial transaction service delivery. Hence every day, the reception is an impressive turnout, and it is just a pointer to the fact that people have longed for something much more better than the traditional financial processes that we have known from time immemorial.
Here are some five top trends characterizing the FinTech industry, which may help us see what the future looks like for the industry.
• The blockchain technology, and the birthing of cryptocurrencies
This is one major achievement of the FinTech industry, and it would be a long time to get over the euphoria of it. Bitcoin and the altcoins have provided a ease of payment option that is entirely devoid of long processes, and third-party interference. It also provides an opportunity for transactions between individuals from everywhere, with several coin options to choose from. The blockchain technology as the host platform is of advantage in that it ensures transparency and immutability of transactions, as well as a long time record keeping ledger, that can be accessed by users on the network. The proliferation of project specific blockchain protocols also allows users to access goods and services anywhere in the world without issues with currency differences, or the tedious processes required to change one fiat currency to the other. Other exciting features of the blockchain are the use of smart contracts and decentralized applications.
• NFC enabled payments
Near field communication is the financial technological tool that powers contactless payments, using credit and debit cards, and other chip devices. It makes payments come easy for the user, as transactions can be made almost anywhere, once a communication with a source network can be made. This technology is currently used for transaction payments, especially in supermarkets, gas stations, local stores and etcetera via the EFTPOS machines.
• Regulatory, and tax issues for government agents
Government regulatory agents have been able to monitor and raise tax funds by holding the commercial banks accountable. This becomes increasingly difficult, as more people migrate their payment transactions to the less noticeable, or traceable decentralized mediums. This of course, is a problem for the commercial banks and government, who are finding every way possible to reverse this trend.
• Banks are responding positively to FinTech
Many banks are beginning to see the need to incorporate fintech methods into their own overall banking systems, as a way of catching up with the competition, and staying in the market. Hence, there is a massive launch out aimed at acquiring some of the FinTech companies available, by the big banks.
• Increased need for artificial intelligence and big data
As a means of ensuring sustainability, security and effectiveness, FinTech companies are beginning to make use of large amounts of artificial intelligence and big data. This would help them ensure fraud detection, as well as data claims management. This is one germane aspect of their sustainability prospect.
Whatever becomes of the FinTech industry in future lies in how much acceptance it can garner from people involved in money transactions. This would imply surmounting all or most of the current challenges.