When it comes to fin-tech, Blockchain is all set to rule and further push the potential of digital wallets. With proper regulations, security and national standards in place, countries will be happy to adopt all these tremendous technologies.
Most financial institutions now fear that fintech startups and digital wallets are roaring everywhere, with countries in a virtual jostle to set national standards.
Fintech is being called a technology ready to disrupt $4.7 trillion worth of global financial services. This is why many traditional financial companies have already gone to either invest in these very fintech startups or partner with them. The results of these ventures have been largely positive and will grow in coming years.
Here are the fintech trends of 2020-
Digital-only banking is looming
The financial world has already recognised how a bank that only exists in the virtual world offers global payments, P2P transfers, contactless MasterCard with free transaction fees—and a chance to buy and exchange Bitcoin, Ethereum and other cryptocurrencies. Such banks are growing in numbers and revenue all over the world.
Digital-only banks have a lot of advantages:
- No need to spend time to go to a brick-and-mortar bank
- No queues to try your tolerance
- No distressing paperwork to put up with
- Reset pins at the comfort of your home,
- Snap-a-pic bill payment,
- Convenient expense management,
- Quick balance review features,
- Real-time analytics
This is why visits to bank branches are set to drop 36% from 2017-2022.
Blockchain in global finance make-over
Fast, truly global in reach and with low processing fees, blockchain continues to be on the way of completely altering the face of financial transactions globally. China and the US are leaders in the world in blockchain use, enabling its fast adoption in other countries. Financial services companies are investing more and more to stay at per with blockchain innovations. 77% of these companies want to see live production systems by 2020.
The enthusiastic dash by investors to augment the reach of blockchain services is of course easily matched by the ever-increasing adopters of blockchain wallets, which is now at 40 million worldwide a huge rise from 11 million in 2016.
AI: a natural for financial institutions
Since bank revenues now exceed a nation’s income, they are the first to adopt AI. Banks have also staerted fine-tuning their AI solution strategies which in turn will drive the wider adoption of AI in the sector. AI is expected to decrease bank operating costs by 22% by 2030, ensuring savings of nearly $1 trillion. However, with the short supply of professionals skilled in everything AI, the way forward is complex. Also the ability to work with unstructured data has placed AI well poised to tackle the growing incidence of cybercrimes, financial fraud threats among them. For quicker transactions and customer convenience financial institutions will soon adopt AI in a large scale.
Intensifying fintech regulation
Being one of the heavily regulated industries, financial sector is going to draw more attention of governments all over the world, with the entry of blockchain. Naturally, nations would be anxious with an array of headline-grabbing financial breaches. Blockchain investors will whine about regulations not made for them in the first place. But we know that security is a major issue irrespective of the type of financial services. In this period of digital banking, the subject that regulators will inspect closely is the issue of data ownership.
Payment innovations
Payment innovations in fintech have numerous apparatus and cogs like mobile payments, contactless payments, mobile wallets, smart speaker systems, identity verification technologies, AI and machine learning for security.
Gen Zers who are the first really digital natives, would also comprehend a lot in the dialogue of payment innovations. Being the first generation to witness the beginning of cashless transactions they are more at ease with these innovations. Mobile payments are already ahead of the way by clocking a total of $1 trillion value in 2019. This will increase exponentially down the line. The number of people using contactless payments will reach 760 million by 2020.
Mobile wallets will fast replace physical wallets. Taking into account the blockchain technologies, fintech payments is going to explode further in next few years.
China to lead the fintech revolution
From wealth management, lending, to payment, fintech has ventured into everything, entering all financial services sections globally. Though Fintech enthusiasts and promoters are everywhere in the world, China unquestionably appear to be the leader in many respects.
All indicators confirm that investment in fintech, new technology that can improve and automate financial services, is skyrocketing and is expected to exceed $30 billion by 2020. This investment will translate into dramatic time and cost savings and enhancements to service offerings from financial institutions. Here are the top 5 fintech trends everyone should be watching in 2020 because they will impact anything that involves money.