Predicting the future of an activity in such an ever-changing world can be risky. However, there are some trends that we can catch a glimpse of today and seem to be only the beginning of a path that is unlikely to be cut short. This is also true in the FinTech ecosystem. In this post, we are going to cover some perspectives regarding future FinTech solutions.
Fintech, democratising technology
It would be naive to think the fact that technology is being used for the purposes of finance (although it is true that FinTech firms, in general, are focused on clients, even small ones) means large banks and small start-ups, or preferred bank customers and modest individual ones, will be on an even playing field. But it is true that the disruptive technological solutions FinTech tools are based on, which don’t require as great an investment as other sectors, don’t exclude SMEs with the drive and potential to innovate.
Likewise, it must be noted that apps and other API tools often focus on direct company-technology relations, without going through banks; or even between individuals (like peer-to-peer loans and crowdlending). Finally, as they often depend on the number of users and how satisfied they are, small outfits finally count, unlike what commonly happened with traditional banking.
When competition is stimulated in a market, clients and consumers benefit. They can choose the product that best fits their needs, that guarantees them the greatest transparency or security, that is the most affordable, etc. This is what has started to happen with the arrival of FinTech firms on the scene, but it is sure to go even further in the future. For several reasons.
This increased competition among financial services and products is due in part to the fact that, after resisting the change resulting from the appearance of the earliest FinTech firms, the traditional financial sector has had to get moving and, whether directly or in partnership with a FinTech firm, improve their technology-based offering (and with it, user experience). But also, the GAFAs (Google, Apple, Facebook and Amazon) have begun demanding their own spot on the FinTech scene, which will further fuel the battle for financial-services clients.
Fintech and the automatisation
Another of the expressions gaining ground in the new panorama is process automatisation. We see this, for example, in digital payments, which use technology to decide whether the payer is trustworthy and the operation can be completed (operations that, on the other hand, have become faster and now occur in real time). Automatisation has also found its way into the loan arena. Technology solutions make it possible to assess whether or not to grant loans based on automatised analysis of a customer’s behaviour, without getting banks involved and minimising the risks with objective data.
Automatised processes have also moved into the realm of investments. Technology makes it possible (using predictive models, algorithms, statistical analysis, etc.) to trust tools that help calculate the risk and return of any investment.
Virtual assistants, blockchain extensions, big data… they’re all here to stay
Terms that are still completely foreign to most will be at the centre of developing new FinTech solutions. This is the case of virtual personal assistants, which will go much further than the ones we know now (and interact with, above all, for basic issues, like requesting information with our voice). They will give us resources and offers based on our needs, tastes and financial capabilities. In the same line of taking advantage of artificial intelligence and other types of new technology, we will see an increase in roboadvisors, which will become the perfect financial advisor.
Blockchain technology will spread to many more fields, beyond cryptocurrencies, applying its intermediary-free transactions to many new services. Big data will grow and be used more and more by companies (not only large ones) to launch offers personalised to their clients. The concept of FinTech will reach sectors where it was barely present before… Now hardly anything will be governed by immovable patterns, as they have for years. Speaking of mobility, the use of mobile technology will continue to spark changes in customer-provider relations. And companies and consumers alike will benefit from this new paradigm. At Unnax, we’re part of this transformation and we’re helping others get started with it. Want to join us?