The Future of Fintech: Top Fintech Trends in Application Development Key Fintech Industry Trends in App Development
Technology is ever-evolving, and fintech - the use of technology as a vehicle to improve financial services – is no different. The fintech industry, to provide better financial services to those who need it, has undergone and is undergoing several evolutions of its own.
For the foreseeable future, the following are the critical trends in app development that are emerging in the fintech industry. These trends represent the direction in which the industry is headed and the problems it is trying to solve to provide better services.
These trends in fintech include:
- Increasing adoption of Open Banking to ensure the provision of better financial services
- The adoption of biometric identification systems to bolster security
- Artificial intelligence and machine learning are applied to detect and prevent fraud, generate stock market predictions, calculate risk factors for loan creditors, and strengthen the relationship between financial institutions and their customers.
- The increased adoption of blockchain technology ensures more security and improved accuracy, among others.
Below, we examine several fintech industry trends and their likely impact.
Artificial Intelligence and Machine Learning in Financial Service
Artificial intelligence and machine learning are two fields that are experiencing massive adoption in the fintech industry. The reason is simple: they hold a ton of opportunities for the industry.
- For instance, machine learning systems can analyze user behavior, identify patterns that deviate users' established activities, and thus, detect potential fraud and security breaches. And when this occurs, safeguards can kick up to protect against it.
- Another potential that machine learning portends is the calculation of risk factors for loan providers. The technology can determine how much risk a loan applicant poses and whether they are worth the trouble or not. To do this, it will examine their financial data and behavior.
- Furthermore, machine learning provides an opportunity to bolster the interaction between financial organizations and their customers. For example, it is applicable in developing smart systems like chatbots that can provide faster assistance to customers and ensure they get speedy resolutions to their problems. For instance, AI-augmented chatbots can provide users with financial advice, help them access their account balances, and ensure their wishes are fulfilled sooner than later.
- Also, machine learning and artificial intelligence can, with access to data like news, social market trends, and trade results, among others, make stock market predictions for traders.
The above are a handful of the many possible applications of artificial intelligence and machine learning in financial services. As a result of the projected impact of these technologies, they are experiencing increased adoption in the fintech industry.
Biometric Security Systems
Another emerging trend in the fintech industry is the use of biometric security systems. Biometrics, including fingerprint identification, iris patterns, DNA identification, voice scanning, retina patterns, and facial features scanning, provide a means to ensure that the integrity of financial systems and transactions are preserved.
With most mobile devices having at least one form of biometric technology, it represents an ample opportunity for financial organizations to ensure their customers' data and finances are safe and secure. And the best part of this is that not all forms of biometric technology require contact; hence, people can use them to access financial services without having to come into contact with other people and risk their health.
With the implementation of biometrics in banking, security issues like fraud and breaches of confidential information can be put to bed. Thus, customers' trust in the financial system will increase and more transactions will be conducted.
Blockchain is a distributed ledger technology that ensures the safety and security of data by storing them on thousands of servers across the world. This technology was initially created to protect cryptocurrency transactions from hacking, thus ensuring their security.
The workings of blockchain technology hardly need any explanation these days as it is a widely known technology. However, to recap, fintech blockchain works by recording every chain of financial transactions in blocks. Each cryptocurrency transaction is a component of a block within a chain and is linked with both the previous and next transactions. And to change a previous transaction, every party involved in the chain must give their approval. For this reason, it is virtually impossible to penetrate the system, hence ensuring robust security.
In contrast, regular financial transactions transfer pieces of code solely from one transacting account to another. Unfortunately, hackers can easily duplicate the necessary code of these transactions and access the money embedded in them. Apart from that, they can also modify the code, thus gaining the power to manipulate the amount of money in an account to reflect their wishes.
Since security is a vital part of financial transactions, many financial institutions join the fintech and blockchain trends. That is, they are beginning to implement blockchain in their financial systems due to its insurmountable security.
Blockchain fintech has numerous functions aside from the quality of its security. They include the following:
- Blockchain ensures faster transactions without an intermediary
- It improves transparency between the stakeholders of a transaction
- It improves regulatory reporting through its real-time tracking feature
- It reduces the need to put things in the financial back office; hence it saves money.
Due to digital banking, financial institutions have long been at users' fingertips. However, not all interactions with a financial institution are a monetary transaction.
Sometimes, users simply want to make inquiries on issues they find knotty without contacting a financial agent. Sometimes they want to conduct transactions with no need to visit a physical branch.
In other words, customers sometimes want to interact with the financial services sector without going through conventional banking methods.
Luckily, there is a solution to this problem, and it is called conversational banking.
Conversational banking is a digital banking process that personalizes human interactions with financial institutions. To achieve this, it utilizes different, numerous forms of communication, including voice, visual engagement tools, and text messaging applications.
Conversational banking bridges the gap between the users of financial services and the providers of these services by providing an easy to utilize means of contact – messaging apps, mobile apps, and websites, among others. Additionally, conversational banking grants institutions access to critical data on customer financial behavior, intentions, goals, and desires, which they can then deploy to provide better, improved financial services.
The primary aim of conversational banking is to understand the needs of each user and provide the best possible solution to their problems.
Benefits of Conversational Banking
Conversational banking allows users to interact with voice assistants, finance chatbots, and human agents through live chat and mobile apps. Thus, it provides customers with a convenient and personal method to communicate with these institutions.
The following are some benefits of this fintech trend:
- Always available
Users do not have to wait to receive a response for their query. The reason is that there are bots that are available 24/7 to respond to common user queries.
- High-quality financial services
With this trend's digital engagement tools, it is easier to identify errors and proffer effective solutions. It also improves first contact resolution and reduces the frequency of touchpoints.
- Proactive engagement
By reaching out to customers when they have issues, you are actively helping them to get solutions to their problems. Thus, it allows you to improve brand loyalty and customer satisfaction.
- Reduced errors
Working manually leaves financial companies susceptible to mistakes that can pose enormous problems for their operations. However, with conversational banking, it is possible to avoid these complications and get error-free service. For instance, finance chatbots are programmed with every necessary information required for customers to enjoy smooth financial operations. As a result, they leave little to no chance for errors.
Innovative Payment Solutions
Not many people have the time to visit a bank in the modern-day. Besides, the pandemic has demonstrated the futility of visiting a bank to access financial services.
Because of this, there have been many innovations to ensure that customers can still have unrestricted access to financial services from any location they are. And because of the convenience it offers, this trend has caught on with many – financial institutions and users alike.
Being one of the futures of fintech trends, innovative payment solutions are expected to rise by 43% in 2021 compared to 2020. This statistic, provided by Statista, proves that fintech companies will benefit significantly if they focus on mobile technologies and innovative payment solutions.
By the way, innovative payment solutions don't necessarily mean the integration of the latest technologies into your fintech structure. Your innovative payment solution can involve the modification of existing technologies. It refers to how well you can solve a problem, whether by building new tools or leveraging existing ones.
In simpler terms, you don't need the latest technologies to develop a successful app. All you need is to innovate and match appropriate technology to required social change. Bear in mind that successful innovation involves matching the right technology to the right demand at the right time.
Below are some innovative primary solutions that are a part of fintech trends today.
- Mobile payment: This includes phone-based payment services that focus on mobile devices that support app usage.
- Offline payment solutions: While internet speed has increased, connectivity remains a big issue in many areas. An innovative payment solution that solves this is the provision of offline payment options for mobile devices.
- Contactless payment: This is an innovative payment method that employs the use of tokens. It also reduces the time required to complete payment transactions and simplifies small ticket transaction payments.
Incorporating Fintech Industry Trends in App Development with Boston Unisoft Technologies
Whether you are just developing a new fintech application or simply want to update an existing one, incorporating fintech mobile app development trends like financial machine learning and biometric banking should be a high priority. The reason for this is simple, incorporating these trends will enable you to provide better services to your customers. And when customers are satisfied with the services you offer them, you can rest assured they will become loyal to your brand. Not to mention, incorporating these trends will ensure you remain competitive.
Boston Unisoft Technologies is a software development organization with tremendous experience in building for fintech organizations. With over a decade of developing different software applications, you can rest assured of a high-quality and intuitive application that your customers will find very helpful. What's more? To create the right application that will efficiently meet your customers' needs and ensure you stay ahead of the competition, we will incorporate the appropriate financial services technology trends, whether it involves machine learning applications in finance or artificial intelligence in financial markets, and so on.