2020 FinTech Trends & 7 Predictions that you should be aware of!
The market trends implicate that FinTech investment can enhance & automate the tedious financial operations, which leads to the skyrocketing investment of $30 billion by 2020, and it is estimated to increase gradually. This investment is to reduce the manual working hours and the cost spent. The post-crisis regulatory frameworks have been steadily putting down to its place, and financial firms have been amending their business strategy accordingly.
Here are the 7 FinTech trends everyone should look out for in 2020 due to their huge impact on the overall strategy.
1. Strengthening FinTech Regulation
The financial industry is one of the highly regulated sectors globally, and the venture of Blockchain might further attract the attention of the regulatory authorities & the governments all over the world. While few financial institutions & the governments are nervous about the privacy breaches, the investors in Blockchain are regularly complaining about the regulations not put out in the first place. The concern for security becomes the prime concern instead of customer experience or operational efficiency.
In the age of digital, the ultimate conclusion should be the strengthened FinTech regulation to fulfil the data privacy requirements of the customers without compromising the operational efficiencies of the financial institutions.
2. Asia to be the pioneer in the digital payment Industry
According to Business Standard, the digital payments in Southeast Asia is expected to exceed USD 600 billion this year and will continue to grow exponentially to reach USD 1 trillion by 2025.
Based on data published by the German online statistics portal, Statista, the total value in digital payment transactions in India stands at USD64.8 billion in 2019. This is expected to grow at a CAGR of about 20 per cent reaching USD134.6 billion by 2023, and a similar growth rate for another two years will see the usage of digital payment methods by Indians reach USD194.1 billion by 2025.
The payment industry started growing in Asia to fulfill the seamless and secured way of paying day-to-day needs without the traditional method of payment. Targeting the millennials, the financial institutions were pushed to innovate the payment methods accepting globally. APAC region will be the pioneer for more technology innovation in payment methods than anywhere else around the globe for the next decade.
3. Digital lending everywhere
The FinTech revolution is a growing success in terms of its outcome, the way it is transforming the business strategy, and the traditional banking legacy systems and services to new-age banking is at a staggering rate. If the banks are planning to stay competitive in 2020, they should adapt to the digital and innovative lending services more integrated, flexible, and efficient methodology, especially working within the SME market.
Collaborating with FinTech providers will enable the financial institutions to offer multi-channel, self-servicing digital lending products inclusive of loan processing, re-payment, risk screening, and credit scoring in a single platform as an automated end-to-end process. This will offer a quick and seamless customer experience and the whole process to be completed over a few minutes rather than waiting for a week or month for the loan.
4. Offering high personalization using Big Data for customer intelligence
For more than two decades, marketing professionals are adapting the personalization to attract the customers and keep them in their buyer journey and to retain loyal customers. Due to the accessibility of AI and Big data, it enables us to derive insights from the customer data, which makes the personalization much better and efficient on an unprecedented scale. Through customer’s behavior, social presence, and browsing pattern; financial institution can able to predict the future requirement of the customer and offering them the precise offers which they could never refuse.
5. Leveraging RPA for tedious manual process
During 2020, robotic process automation (RPA) will continue to impact financial institutions to help them be more efficient and effective as well as help ensure they meet federal and state compliance requirements. Today’s advanced RPAs don’t have to be explicitly programmed to perform tasks; they can simply observe what humans do and then automate or suggest improvements to processes. This includes processes such as customer onboarding, verification, risk assessments, security checks, data analysis and reporting, compliance processes as well as most other repetitive administrative activities.
6. AI for better customer experience & operational efficiency
AI and big data have offered businesses to access exponentially more data about customer behavior using analytics to unlock the required insight for better customer experience.
Robotics and AI can reduce costs and mitigate risks. It can also target social and emotional intelligence, natural language processing, logical reasoning, identification of patterns, and self-supervised learning. And this can far beyond replace all of the banking legacy processes and the systems.
7. Blockchain Technology to make finance easier
This decade is going to witness the huge uprising of the term ‘Distributed/public Ledger’ in the financial industry, and this will become the major focus of financial, operational infrastructure. Blockchain adapting to the AI & IoT technological advances can move further to enlighten the vision of transparency & security in the financial operations.
According to Gartner’s research, a majority (75%) of organizations that have adopted IoT technology either have already integrated blockchain or are planning on doing so during 2020.
In an industry where technologies and growing business models are now fairly collective, collaboration needs to be at the next level, and banks should start adapting far beyond legacy systems and should embrace FinTech, hubs, sandboxes, and strategies into its ecosystem.
While few financial institutions are adopting new technology to enhance operations and improve customer experience & service, these seven trends will provide the perspective for the 2020 trends for innovation. Financial firms should realize the importance of using FinTech to leverage their competitive advantage.