Banking and financial institutions need to constantly adapt to meet changing customer needs. In recent times, banks have had to battle pressures of reducing costs while maintaining long and profitable relationships with customers. The fintech industry addresses this need by providing contextual user experience, payment acceptance channels, and marketplace lending platforms.
The level of innovation in the fintech industry grabbed headlines in the better half of 2017, signaling the level of maturity achieved in the market. In the past five years, the investments in the fintech industry have been largely focused on retail payments. However, its maturity has brought about greater diversification and innovators have brought about greater disruption. Apart from this, there are enhanced elements along the financial services value chain. One of the fastest emerging aspects of the fintech technology is in insurance, as InsurTech propositions more than tripled from 2014 to 2015. Going by numbers, the fintech industry has a volley of innovative strategies that are yet to unfold in the coming years. Let’s take a look at the top three innovations and themes that will be predominant in the fintech industry.
1. Security and risk management startups take center stage
Financial services firms face difficulties in ensuring anti-money laundering and meeting know-your-customer requirements. Firms seek better ways of identifying customers with a higher rate of accuracy, while, at the same time, ensuring that the experience is simple and convenient for customers.
Biometric technology as a form of identification is increasingly used by financial services and one of the more popular solutions offered is the Eyeprint ID. This is a product of Aida Technologies’ EyeVerify (a wholly owned unit of Ant Financial). Another popular contender in the field is Daon’s IdentityX, which is also a leading technology in the industry.
2. Mobile banking services grow in sophistication
Mobile banking services are growing in sophistication by propelling investments in the fintech industry towards solutions for the visually impaired. For instance, mobile banking apps that require touchscreen activation for selecting their icons and conducting transactions, cannot reach out to the visually impaired. Mobile banking fintech firms use advanced technologies such as touch and voice capabilities and machine learning algorithms.
Among the solutions offered, Beacon Interface is a virtual touch feedback and non-location-based navigation. Another platform is Finn.ai is a white-label platform with a Chatbot powered by machine learning algorithms. The latter is partnered with ATB Financial in Canada which intends to launch the “first-ever banking chatbot” on Facebook Messenger.
3. Payment fintech companies – driven by a range of customer preferences
Fintech companies are transforming B2C and B2B transactions by empowering customers with the ability to pay using their preferred payment methods. Today, enterprises accept a variety of payment methods.
For instance, MasterCard’s Dynamics brings simple and secure e-commerce payments to users in 13 markets with the integration of Simplify Commerce. CIBC too will manufacture CIBC’s Double Visa Card AlphaHub as Alpha Payments “payment-as-a-service platform”. This is a venture with Australia Post to bring new payment options online to merchants in Australia.
If the survival of the fittest is the law of the land, the financial services are geared up to survive the upcoming trends with the help of innovations in the fintech industry. Timely assessment, quick adaptability, and adoption of new technologies will determine the success of financial services in the new industry structure.