Cost Reduction
Apps that use fintech can help lower your business's costs. These apps make certain processes automated and eliminate the need for you to be present physically every step of the way. The price of such services is, therefore, lower.
Offers Benefits to Customers
Transactions are easy now, and all credit goes through smartphone apps. All details about each transaction are available to customers. Fintech apps made the transaction process simple. Everyone can now have financial products and access them without opening a bank account. These fintech companies are a blessing.
Get Services Quickly
Everyone today needs quick financial services. Fintech companies make it possible. It is crucial to get these services approved. This is easy. These services are easily accessible. These services are now available through fintech apps.
FinTech App Development Trends Dominating Market in 2023
According to statistics for 2023, 89% of US citizens own a FinTech product. This is 54% more than the 2022 figure. This shows that FinTech is a rapidly-growing sector that provides great satisfaction to consumers.
Certain FinTech trends are still making waves in this year's financial technology market. This is why there has been a slight increase in user rates. These are:
- Inflation in neo banks.
- Cryptographic ledgers in high demand.
- Integration of chatbots with custom code.
- Integration of FinTech APIs is on the rise.
This checklist gives you a quick overview of the top trends. Here is a more detailed description of each.
Open Banking
The 2020 pandemic saw the rise of digital payments and autonomous neo-banks, highlighting the need for optimal digitization in the NBFC space. This digitization is being accelerated by Open banking. This API-driven approach allows banks, FinTechs, and micro-lending companies to deliver their services using secure, authenticated, and integrated customer data.
Many countries are implementing regulations that require banks to offer open banking as part of their services to meet growing customer demand. FinTech companies are actively embracing open banking standards in their products and services. Available baking will be a hot trend for the next few years, so enterprises should start implementing it with technology partners.
Voice Recognition
Financial companies are increasingly using voice recognition technology due to its popularity. Siri and Alexa are two popular options that customers can use to perform transactions or pay their bills online.
Voice recognition is a subset of biometric technology. It uses the user's vocal cords to authenticate and authorize financial transactions. Although voice recognition is yet to become a standard part of FinTech applications, security is a major concern. Voice recognition technology is less secure than fingerprint or face identification. Some financial institutions have begun experimenting with voice recognition for their FinTech initiatives.
Gamification
Gamification is hot in the financial sector, and it's taking control! Gamification is a way to increase customer engagement by incorporating gaming elements in your fintech app. These features could include quizzes and cashback rewards programs that can be personalized for each user and traditional activities such as trading stocks or managing money accounts. These games allow clients to track their spending habits using progress bars or events. They also provide positive feedback that can be used to help them make wise financial decisions.
Blockchain
Blockchain technology has completely transformed the FinTech industry's mode of operation. Thanks to this cutting-edge technology, transactions can now be done securely and safely. Banks and financial institutions are now adopting Blockchain technology to reap its many benefits.
According to a report from Business Insider Intelligence, about 48% of bank representatives believe that Blockchain technology will have the greatest impact on their banking business goals.
Blockchain is a cutting-edge technology that also promotes decentralized finance. This philosophy aims to minimize centralization. Blockchain makes it extremely difficult to modify data once stored in the system. This ensures that it is protected.
Blockchain is a way to ensure that information is stored securely and with minimal risk. Secure cross-border payments can also be made using blockchain.
P2P financial platforms, which allow monetary transactions to occur decentralized, have also been developed using blockchain technology. Banks and financial institutions are looking to increase their Blockchain technology investments to reduce costs and improve internal procedures.
Artificial Intelligence
AI algorithms offer a remarkable opportunity to predict accurately based on historical data patterns. This AI feature provides analytical insights and helps gather unstructured Big Data in an enterprise. These are the key factors that AI will be a top technology trend in fintech.
Fintech startups can also reap the benefits of certain technologies. AI can be the foundation for a propensity analysis, a chatbot using Natural Language Processing, or a face recognition system for the financial sector. AI is most effective in large organizations that deal with large data sets.
Chatbots
Computer programs can simulate human conversation via voice, text, or video on messaging platforms. They are used in various industries, including customer service, sales, hospitality, social marketing, and social media marketing. It is commonly used to answer simple questions via instant messenger (IM) and as an automated customer service representative.
Chatbots can increase trust and serve international customers better in fintech. They provide informational, transactional, and advisory support for users. Clients can check their balance and request new insurance packages more efficiently and less expensively.
Analytics and Expense Tracking
Fintech apps are replacing the use of checkbooks to calculate income and expenses. Users need only link their cards to the apps, storing all transactions and giving full stats on their financial activity over a given period. It allows you to manage your finance sector and make better financial decisions. These apps offer many benefits, including data security, simplicity, and an easily accessible format for information. This is especially important in areas like finance.
Biometric Security
Users expect seamless, secure mobile banking transactions that require only a few taps. Every mobile marketing involves security. Biometric security is one of the most preferred features for secure banking transactions. Each transaction is authenticated by biometric technology.
Biometric functionality requires fingerprint reading. NFC and RFID-based solutions are expected to replace fingerprint authentication soon. This feature can be integrated into your Fintech mobile wallets app by contacting the Fintech app developer.
Robotic Process Automation
Robotic Process Automation (RPA) is becoming a popular finance technology trend. RPA technology trends are expected to remain positive over decades as robots and machine-learning technologies expand their acceptance. This is due to its ability to hyper automate the development process.
RPA will play an important role in 2023 due to the increasing pressure on banks to offer flexible and tailored solutions to their clients. Organizations may use robust process automation technology to create and deploy intelligent bots capable of communicating with software interfaces and deciding what to do when certain triggers occur.
Voice Commands
Voice recognition will see a significant increase in 2022. Users can use voice commands and recognition to authorize payment transactions and other banking requirements. Customers can use Siri and Alexa to perform trades or other activities, such as online bill payments.
Many users still rely on voice comments, however.
Mobile app development must develop this technology. Particularly, the security requirements of voice commands should be considered. Because of its ease and convenience, people will be more inclined to use voice commands.
Read More: A Complete Guide to Fintech App Development
How is Fintech Reshaping the Financial Industry?
Banks, credit unions, and other financial institutions have had to catch up with the latest software developments and technological advances made by fintech startups. This is a rapidly changing global economic landscape that will not be reversed.
Financial technology (fintech) is rapidly expanding around the globe and affecting many processes in the sector, including customer experiences and service, payments, transactions, lending, insurance, and account management.
This summarizes how disruptions caused by fintech startups have affected the financial system over the past few years. It also includes some statistical data.
- 85% of banks consider digital transformation a top priority
- Globally, 34% of consumers use fintech services to transfer money.
- 77% of financial institutions are looking to innovate more
- 60% of traditional banks will team up with fintech startups. 82% anticipate these partnerships expanding in the next five years.
Fintech is constantly innovating to meet customer needs better. What does the future hold for the financial industry with all these changes? These are just a few of the ways that the fintech revolution has disrupted the financial services industry:
Customer Service Chatbots
Chatbots are gaining popularity, especially among banks. They use the functionality to streamline customer interactions, which has also become known as conversational banking.
These virtual assistants benefit agents as they can focus more on complex or relevant tasks and spend less time answering basic questions.
Chatbot technology has many advantages for financial services. It can provide quick support for simple questions, point customers in the right direction (relevant websites or service departments), and automate data collection.
Chatbots can integrate with other technologies and applications and use machine learning to improve usability. Chatbot technology can also be integrated into mobile banking apps, allowing customers to ask questions and collect relevant financial information.
Chatbots can be useful for customers because they can provide 24/7 assistance, unlike human interaction. Chatbots can now assist customers with their queries and help them find the information they need online. This has led to a higher customer satisfaction rate.
Although some people still prefer to have human contact in various processes, a digital hybrid approach now appears feasible. It most likely will become the "new normal" for financial services.
Transactions with Blockchain and cryptocurrencies
Businesses in the financial sector have a huge opportunity to follow up on open innovation. A great way to do this is by adopting a Blockchain-based approach. Over the last few years, cryptocurrencies have disrupted the banking industry by offering faster and more affordable ways for users to transact.
While we are yet to see the long-term effects of this wave on the sector, it is notable that it was quickly implemented and has reshaped payments and transactions. Blockchain is a reliable trading platform that offers greater transparency. Customers have used cryptocurrencies to transfer money, reduce costs, and save time.
Omni-Channel Customer Experience
Customers continue to connect digitally with businesses through digital channels. There has been a rapid shift in user interactions. Banks have gradually moved away from traditional procedures and branch-based activities and are now almost exclusively digital.
A seamless omnichannel experience that meets the needs of new customers requires mobile as well as social media, email, chat, and SMS. Companies that want to be truly customer-centric recognize the need to make customer communication easy through every channel.
An omnichannel experience for customers in banking means they can have consistent and seamless interactions online, no matter their device. Fintech is changing user behavior, and financial institutions are becoming smarter. They aim to move sales and transactions to digital channels to provide a better user experience.
This trend is reflected in the emergence of fintech startups. They can offer software that allows financial institutions to use multi-channel messaging.
Another technology that can be used to help financial services in their quest to provide omnichannel support, is an addition to this equation. This tool is being used by banks and credit unions and by economic agents, lenders, and insurance professionals who can co-browse consumers and offer in-person assistance.
The main advantage of allowing agents to follow customers and visitors on certain web pages. Agents can then help with a Show and Tell approach at crucial stages of the buyer's journey, from presale application form filling to customer onboarding.
Open Innovation for New Developments
Digital transformation has maintained a focus on openness. Financial giants are increasingly open to external solutions. They have opened their doors to third-party innovators for new ideas and developments.
Accenture's report shows that many new fintech companies embrace the open concept. Fidor Bank, Germany, has created a middleware that uses an available Application Programming Interface. This allows it to connect to existing banking platforms and offer services such as lending, emergency loans, and money transfers via Twitter.
Open innovation continues to gain popularity and fosters competition. Existing banks and credit unions may partner with fintech providers that offer available banking technology to simplify affordability assessment, credit search, and reporting on bank statements.
Automation for Financial Advice
The world of financial advice has been surprised by the rise of robo advisors or virtual assistants. This poses a serious threat to traditional operators. Although the pressure will likely prevail, developments in automated technology for financial advice continue to emerge and offer viable solutions. Automated messaging is used to communicate with customers via live chat.
A hybrid approach between humans and machines can be used to automate the delivery of financial advice. Automations are used in this sector for various purposes, including delivering basic advisory and data-driven insights to provide more customized services.
Financial advisors and agents involved in wealth and asset management can use Insurance Management Portal automation to generate leads, establish customer relationships, and offer a better service.
The Key Takeaway
The expectations of digital banking are changing, and the banking industry must rethink how they deliver its products and services. All customer journey stages are covered with advances in fintech, chatbot technology, machine learning and AI, mobile wallets and modern messaging, and automation. There are more development stages on the horizon.
Banks and financial services should keep the customer at their core. This will ensure seamless, omnichannel experiences. Traditional retail banks will have to watch the digital revolution led by fintech startups and challenger players and look for opportunities for partnerships, open innovation, and strategic investments that could significantly improve their operations.
