Technological progress moves humanity forward and improves our lives. Innovation is a key condition for any development, whether it is medicine, science or trade.
In the field of fintech, evolutionary trends are especially important because they stimulate the growth of the industry and improve security. Experts predict rapid world finance market growth in the coming years, and it is the latest technologies that will drive this growth.
It’s quite simple: the one who is open to the new and actively implements innovative approaches is riding the crest, but traditional systems will likely remain in the past. New technologies are destroying everything cumbersome and outdated, completely changing the business landscape in the field of finance.
So, in order to have a competitive advantage in 2022, you need to know the main fintech trends. Let’s talk about them in more detail.
Trend 1. Neobanking
Neobanking is an up-and-coming fintech solution. The services market in this area is growing by 50% annually, as 100%-digital banking institutions are top-rated among users worldwide.
So, what is neobanking? It’s a type of banking organization that provides exclusively online services and doesn’t depend on any physical financial institutions. Such banks allow users to open an account without leaving home, receive the full range of financial services without visiting offices and, last but not least, reduce the amount of paperwork.
Among fintech trends, this is the most solid because the automation of all processes is a must in any product development. In addition, neobanking is a more progressive and less cumbersome business model that allows you to use any new technology and the most powerful analytics tools or implement unique features much faster than it happens in the case of traditional banks. So, this is surely the future of fintech.
Trend 2. Invisible Forms of Identification
European and global financial services regulators require financial institutions to implement Secure Customer Authentication (SCA). And invisible forms of identification are one of the most effective tools to protect client data and online services without negatively impacting the user experience.
A great example of invisible form of identification is behavioral biometrics. This is a great Know Your Client tool to help determine the user and protect his account from fraud.
How does it work? The system in real-time analyzes a wide range of behavioral signals, as well as checks the geolocation, IP address, fingerprint on a device, etc. Because each person has unique features of interaction with the software (rhythm of keystrokes, mouse movement), these actions can’t be repeated or imitated.
The combination of biometric authentication with other security technologies can reliably protect users. Therefore, this trend will be relevant for a long time.
Trend 3. AI-powered Finance Assistants
Artificial intelligence is already an integral part of any progressive fintech product. In the field of financial services, it is used for
- automatic identification of factors and elements that contribute to improving business efficiency;
- accurate financial modeling and risk control;
- rapid processing of large and disparate databases, determining patterns in complex financial systems;
- high-efficiency analytics (using only relevant and qualitatively selected information) with extended confidentiality protection.
AI-powered finance assistants are radically changing the number of operations in the front, middle and back offices. In the first case, such applications allow you to use personalized user experience to find and offer the most relevant services. They are also helpful in consulting system improvement, increasing intelligent service work quality, and eliminating the risk of human error.
Artificial intelligence tools for the middle and back office include fraud detection, financial systems and big data analytics, business process control and visual representation.
AI-powered finance assistants are more operationally efficient. It’s about process automation and assisting human employees in decision-making, and they save time for work that requires human involvement and more creative actions.
Trend 4. Robotic Process Automation (RPA)
Robotic process automation, also known as RPA, is a technology the main function of which is to create, deploy and manage digital robots (bots) to simulate human actions and interact with software and digital systems. RPA can perform simple mechanical tasks that do not require intellectual effort. This can be data identification and management, calculations, moving databases, screen recognition, etc.
RPA Advantages
Robotic process automation reduces staff workload and directs company resources to more important and creative tasks. Also, this technology allows you to increase the accuracy and correctness of routine tasks, and this, in turn, optimizes the work of back offices.
RPA also helps optimize business processes and make them more flexible, facilitates product scaling and increases profitability. The technology is easy to implement and update.
Functions of RPA in Fintech
Bots can perform routine tasks such as reporting, data entry, or transcription. They can also process documentation such as insurance claims or loan requests. RPAs are often used for basic customer counseling, complaint management, and 24/7 customer support.
Robotic process automation technology is a very important trend because it gives a serious competitive advantage with minimal implementation costs.
Trend 5. Biometric Security
We’ve already mentioned biometric technologies when talking about invisible forms of identification. In general, this is a very promising direction of development, and not only in the field of fintech, mainly because this technology provides the maximum possible protection against fraud.
Biometrics are incredibly important for fintech applications, and it dramatically improves the user experience and instantly simplifies user access to their accounts. At the same time, the unique data of each person significantly complicate criminals’ efforts because it’s simply impossible to repeat a fingerprint, retina or voice.
Today, biometrics is also used to authenticate online transactions, change passwords and data, settings, etc. And every year, developers create new methods of biometric identification.
Wrapping Up
We can conclude that the most popular and essential fintech trends in 2022 are neobanking as a totally new form of banks, AI and machine learning for business processes optimization, invisible forms of identification, and biometric technologies. It is also good to pay attention to robotic process automation as it’s a perfect tool for reducing human workload and exploitation costs.
All these trends have already changed the future of fintech, and they will be relevant in the next several years. So it’s essential to keep abreast and prepare the budget for new technologies implementation as they are a definite competitive advantage.