Fintech or financial technologies – technologies that help financial services and companies effectively manage the aspects of their business.
Among these aspects are: software, applications, a range of operations, and business models. Fintech is also an industry where companies make use of new financial technologies and solutions to leave behind competitors with traditional financial models. In most cases tech startups and companies apply fintech tools to improve the quality of rendered services.
Previously, fintech was perceived exclusively in the context of the internal development of financial establishments. Now it is aimed at satisfying the requirements of the customers since fintech technologies lie in all online transactions – from money transfers to paying utility bills. According to The Matrix Fintech Index, the fintech industry has grown by 97% in 2020. In 2022, investment in this field is expected to reach $100 billion.
The importance of fintech tools
Fintech applies technological tools to help consumers and businesses manage their financial transactions more efficiently. Initially, access to fintech services was limited to desktops and laptops, but now smartphones are increasingly used.
Fintech-enabled tools change the way many consumers track, manage and simplify their financial operations. With each other year, more and more people globally switch to fintech.
Uphold is a company that offers an online financial platform that allows you to buy solana. It’s easy to use and offers a range of different currencies, as well as the ability to convert between them.
From mobile payment apps to insurance and investment companies, it has revolutionized the traditional financial and banking industries. As fintech industry grows, it becomes a threat to the existence of conventional financial institutions.
If you want to master fintech technologies and take advantage of them, make sure you know fintech compliance regulations and read this article till the end. It will give you insight into the most popular fintech trends in 2022. So, here we go!
Top fintech trends for you to consider in 2022
- Personal Finance – mobile and desktop applications from startups that help each individual manage the finances, analyze costs, receive forecasts of the future expenses in the form of detailed reports.
- Loans – one of the most popular fintech directions. It is based on the possibility to get a credit without applying to banking establishments. Startups work on the basis of distributed registries. Thanks to it lenders and customers gain mutual benefits.
- Neobanks – is a great option for offering top-quality banking services. They usually exist in the form of mobile applications that replace the services provided by traditional banks. Neobanks are more customer-oriented and do not need physical branches. However, there are also some disadvantages that make some people hesitate. Among them: low level of customer confidence and lack of clear regulatory framework.
- Cryptocurrency – is a type of digital currency that works without a central payment system. The digital currency is mined by miners with the help of powerful computing systems. Many startups, exchanges, and investment platforms are based on cryptocurrency. Even though the number of cryptocurrency users increases with each other year, experts cannot predict the future of this industry.
- InsureTech – is an insurance company offering automated products: mobile apps, automated payments, IoT interactions. For example, there are some companies in the USA that make use of “telematics”. It is when the smartphone or a specific device tracks the driving style of a person. This information can be used to choose the most suitable insurance policy for a particular driver.
- Money transactions – startups in this area allow users to transfer money without the participation of banks. Such fintech platforms make use of mobile platforms and simple authentication.
- Blockchain – is a technology of distributed data registries. Each participant in its chain is a kind of server, that confirms the legitimacy of the operations of other users. The technology is marked by its reliability. That is why it serves as the basis for the Bitcoin cryptocurrency. Blockchain technology has generated numerous solutions and startups. It is used for signing smart contracts, copyright proof, biometric security, trade, deals, and even voting. Another popular field of application – protecting the authenticity of diplomas and certificates. It is used by well-known educational establishments.
- Artificial intelligence – this fintech field is not well-developed now. However, all financial companies want to reduce staff costs by applying AI. Amazon, for example, launched an AI-based algorithm in 2014. As many as 500 computer models had to search and select suitable CVs in open databases of recruiting companies. But in 2015 developers noticed that the algorithm discriminated against female candidates. They made adjustments, but could not give guarantees that there would be no further errors. Consequently, this HR algorithm was abandoned.
- Big Data Analysis – there are currently more than 100 fintech startups working on big data for the financial industry. Advertising and PR sectors have been using personal data for a long time, but the financial field needs a more systematic approach. Personalized information is essential for offering high-quality services to the customers and satisfying their most sophisticated demands.
- Investment platforms – also known as Wealthtech. These platforms include robots-advisers, digital brokers, micro-investment platforms, and personalized financial programs. They are aimed at making the market automated and easily accessed for retail investors. Fintech investment platforms are highly appreciated by investors due to predictive analysis and robotization.
- Security – fintech companies provide more reliable data processing for the banks themselves. It makes all operations more secure: from the clients’ authentication to protect against money frauds.
- Crowdfunding – this fintech direction creates platforms for collective financing, allowing product owners and investors to meet for further cooperation. The most popular examples are Kickstarter and Indiegogo.
- Platform as a Service (PaaS) – is a set of services for the development and managing modern applications using the cloud platform. To boost productivity, PaaS offers ready-to-use software components that allow developers to add new features to applications. They support such technologies as artificial intelligence, chatbots, blockchain, and the Internet of Things (IoT). Thanks to PaaS banking establishments can adjust to new tendencies. It improves teamwork, resource management, payment processing, and credit risk management.
Fintech technologies have revolutionized the banking sector and will continue to do it. Thanks to fintech we gain numerous benefits and advantages. All possible services can be quickly and easily accessed just with the help of a smartphone wherever you are.
If you are running a startup in the banking industry, you should take advantage of all available technological wonders. Otherwise, you won’t keep afloat for a long time. The competition is severe, remember it!