Each year, technological innovations reshape the business world. Technology progresses fast and new trends are adopted practically overnight. Every industry is rushing to integrate new technologies and produce new concepts that will benefit everyone. The financial industry is no different, as new fintech (financial technologies) are revolutionizing how companies both big and small, understand and manage financial processes.
Needless to say, technology has, in many ways, changed and disrupted the financial industry, forcing it to adapt and develop further.
As a matter of fact, emerging companies that rely on fintech are bringing in innovation, while changing the way products or services are being paid for, the way money is being borrowed or lent and how funds are being transferred overseas or simply between accounts.
That being said, fintech startups raised over $8 billion worth of funds in 2017 alone. It’s safe to say that the industry’s growth isn’t slowing down anytime soon. Here are a few top fintech trends for 2018.
The rise of cryptocurrencies
Cryptocurrencies are a main attraction in the finance world for some time now, with Bitcoin being the most popular one. With such increasing popularity, many other cryptocoins have emerged as well.
Today, people are creating their own cryptocurrencies, making the market quite diverse. This gives a lot of options to professionals and individuals alike, allowing them to choose various cryptocoins they want to use.
However, the cryptocurrency market is still fairly unstable and quite volatile, not to mention there are also frauds who want to exploit novice investors.
Nevertheless, the market has managed to disrupt the financial industry and it’s still being viewed as an emerging trend.
Even though cryptocurrencies have arguably a long way to go, it’s advised to keep an eye on this market in 2018.
The digital drive continues on
The year 2018 will have banks on the ropes, due to the challenges of digitalizing their operations. The Open Bank concept was adopted by the European Parliament back in October 2015 as a revised Payment Services Directive also known as PSD2.
Basically, the directive’s rules revolve around the development and use of third-party Open APIs (Application Programming Interface) for mobile and online payments in the financial institutions through Open Banking.
In addition, with the rise of popular cloud-based applications that offer legal and business documentation, such as shareholder agreement documents, the Open Banking promises innovation and transparency.
To further endorse the subject, on August 2016, United Kingdom Competition and Markets Authority (CMA) decided that nine major banks in the UK have to allow access to their data, including transaction account data to licensed startups.
On January 13, 2018, the Open Banking regulations went live. This trend will either force banks to go completely digital or turn into Open Banks.
Introduction to blockchain
Cryptocurrencies aren’t the only thing that’s gaining the interest of the financial industry, but the technology behind them as well. The blockchain is a decentralized public ledger that contains information about financial transactions. Once in the ledger, the information cannot be altered in any way.
Many startups have already developed a proof of concept based on blockchain technology and now financial industry is exploring its implications as a new fintech trend.
There’s still much to explore about blockchain in finances, but it’s expected to have a much bigger presence in the years to come. For instance, there are already attempts to implement blockchain in areas, such as trade finances and payments. There’s also a potential to create alternatives to banking processes.
Presence of AI
In the last few years, artificial intelligence (AI) technology has seen some significant improvements. So much in fact, that AI is finding its way into the financial industry as well. Even now, banks are implementing AI software to speed up processes and ensure a seamless customer experience. It’s safe to say that more banks will follow this trend in 2018.
The main reason is that AI technology can offer more security and risk management, due to its machine learning capabilities. In addition, AI can process multiple complex tasks in real-time, while managing to interact with clients and customers. Most importantly, AI can be used to automate most of the tasks that require manual interaction.
Technology brings new innovations all the time and all the industries are trying to make the best of it. The financial industry is starting to evolve with the newest fintech trends that are influencing the change. Entrepreneurs, individuals and financial experts are excited to see what innovations 2018 will bring to the industry.
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Author Info: Emma is a digital marketer and blogger from Sydney. After getting a marketing degree she started working with Australian startups in business and marketing development. Emma writes for many relevant, industry related online publications and does a job of an Executive Editor at Bizzmark blog and a guest lecturer at Melbourne University. Interested in marketing, startups and latest business trends.