“Banking is necessary, banks are not.”
This statement was made by Bill Gates and you will agree with it if you carry a virtual bank in your pocket with you. If you know how E-Wallet FinTech mobile apps work, you would second this line of thought. This is a technology that guarantees to improve and automate financial services. This transformation was long overdue but the use of digital wallets and e-payment platforms is making it possible as we speak. The transformation of the traditional financial services to digitized and automated operations through electronic payments and mobile apps is one of the biggest technological innovations that we stand to benefit from significantly. The internet and the smartphones that we use have made mobile payments and online transfers, transactions and other financial operations very comfortable and convenient. This technology is not static though. It is constantly changing and we should expect a number of big things to happen in the FinTech sector in the coming times.
Yes, everyone seems to be talking about machine learning and artificial intelligence because the financial industry will be among the sectors that benefit from this technology the most. Digital assistance to clients and consumers with AI-enabled technology which comprises voice assistants, chatbots, automated calls centres and many other functionalities will make banking functions very easy for everyone connected to the FinTech mobile apps through their smartphone devices.
According to an independent study, by the year 2021, chatbots will have become very common. They will increase interaction among customers and banks and financial institutions by a significant 85%. Human involvement will be minimized in these interchanges to enhance productivity and improve the speed of transactions. The conversational interfaces will be a 24/7 service that will facilitate instant responses to customer queries and very fast complaint resolution. It will be an economical way for financial organizations to retain their customers and work upon their feedback to improve their services.
Blockchain technology can make the financial services industry more efficient by preventing fraud and identity theft. According to an independent study, in the US alone, blockchain in the FinTech industry will reach a staggering value of $6.7 billion by the end of 2023. Blockchain technology can be leveraged to create smart contracts and facilitate digital payments along with identity management and also share trading.
Financial technology services are going to increase in demand as we see a constant and inevitable decline in the use of physical money. There is significant data shared by several studies that suggest that e-wallet payments have increased by nearly 50% during the coronavirus pandemic this year. By the year-end, the mobile wallet industry is expected to reach almost $1.47 trillion. This trend is only going to grow in the coming years and more convenient solutions such as payments via NFC and other e-wallet platforms and mobile solutions will be preferred by a large number of customers. If this trend continues, by the end of next year, it will be valued at over $2 trillion. Recent data also reveals that by year-end, the number of people who will have chosen to make payments through FinTech applications will reach over a staggering 1.17 billion! China and India seem to be leading this change followed by countries such as the US, the UK and Brazil.
RPA, which is robotic process automation, is gradually becoming the norm in many financial institutions. These processes are helping financial organizations become more efficient and meet the federal and state compliance requirements as well. Processes such as customer onboarding, security checks, risk assessments, customer verification, data analysis and reporting and many other repetitive administrative activities can be automated with RPA systems. These don’t have to be programmed to perform any tasks. They can observe human operations and automatically imitate them, all the while suggesting improvements to those processes.
By the end of next year, more than 60% of all the searches will be performed with voice assistants. Banking software applications will not be any different when it comes to facilitating voice-based searches. FinTech applications and banking software of the future will provide encryption based on voice notes and will support communication with NLP powered voice assistants as well.
The era that we are living in is all about financial inclusion. Financial products and services are now being designed and personalized according to different income segments of our economy across the globe. FinTech platforms and e-wallet applications are making financial services more affordable and accessible to everyone. Whether it is online and encrypted payments, managing savings and credits, insurance management, money transfer or any other banking and financial services related transactions, organizations worldwide are adopting FinTech apps for greater efficiency. These were just a few innovative trends in the FinTech industry that we discussed here. For more such insights, stay connected with Zapbuild.
(Founder and Chief Executive Officer at Zapbuild)
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