5 Fintech Trends You Should Be Watching
According to PWC, a staggering 88% of legacy banking corporations are aware of this growth and fear losing revenue to fintech companies in a range of areas like payments, money transfers, and personal loans.
As the landscape continues to develop, though, what are the key trends? If you have some skin in the game, you’ve got to stay on top of these trends to succeed.
Here’s a closer look at how fintech is evolving and the five key trends that should be on your radar.
1. Solid Fundamentals Continue to Show Success
In the world of fintech, there’s a big buzz around how new technologies are being implemented into exciting, fresh offerings.
Take artificial intelligence, for example. There’s a huge number of fintech platforms that are growing on the back of promising innovative products that leverage the transformative power of AI. Promise isn’t quite reality, however, and very few fintech platforms are able to secure success solely on the back of AI.
Advanced modeling techniques do have their role, but the prominence of AI and other associated technologies are often overblown. Fantastic fundamentals never change, though.
As fintech businesses come and go, it’s clear that those businesses achieving the best results are the ones focused on business fundamentals and not necessarily fancy technology and new developments.
2. Fintech Companies Are Finding New Ways To Differentiate Themselves
When fintech platforms first announced themselves, customers and investors were drawn in by the beautiful user interfaces and the ease of use of those offerings.
These exciting new platforms completely dominated the more established and conservative banking options in terms of usability. They were attractive and naturally drew people in while creating a big buzz.
Now, though, the playing field has been somewhat leveled. Traditional banking businesses have used their resources to create equally attractive options that entice users and offer a truly special functional experience.
This means that beautiful UI and fantastic UX is no longer enough for fintech platforms. New fintech platforms have to really focus on their product rather than just the skin in which it’s wrapped.
As fintech continues to mature and more platforms emerge, we can look forward to seeing more mature products that focus on substance and style at the same time.
3. China Is Leading the Way
China really is leading the way when it comes to fintech, and we can expect for this trend to continue throughout the year and beyond.
There’s a huge appetite in the country for mobile payments, and this has been the driving force behind the nascent fintech scene. This appetite has created a lot of competition and there are a host of prominent platforms that are growing rapidly.
WeChat Pay, from Tencent (
There is also a range of societal reasons that fintech is particularly popular in China. Perhaps the biggest reason is the fact that debit cards are far more popular than credit cards in the country. This means that there are countless people who require functional credit and those people have started to turn to fintech.
Smartphone ownership rates in the country are also very high, which also drives the popularity of nascent fintech platforms. These factors mean that China will continue to lead the way when it comes to fintech.
4. Voice Control Technology Is Improving
Voice control technology is well and truly becoming the norm in 2019. Smart speaker devices are becoming more popular than ever before, and their popularity means that voice recognition technology is improving quickly.
As people turn to voice recognition for a wide range of activities, it’s only natural that they will begin to expect the same from their online banking. In fact, there are some banks that already offer rudimentary voice recognition technology.
We can expect the level of sophistication to improve and for fintech companies to really drive growth in this area. It’s not too outlandish to imagine that in the near future, people will use voice control for a wide range of financial tasks. Professionals might use it to apply for small business loans, for example, while individuals could conduct their daily banking tasks with it.
5. Fintech Partnerships Are Growing
While partnerships between fintech and banking are still slow to get off the ground, we can expect partnerships and mergers between fintech companies to become increasingly common. Additionally, traditional technology companies like Apple are making significant inroads.
Timing is absolutely critical when it comes to forging these partnerships. Fintech firms have to make sure that new partnerships are going to meet their internal needs while also elevating the experience that they offer their end users.
Fintech partnerships also have to be founded upon a clear mutual understanding of key areas like regulations, security, and data sharing. This is another reason that fintech partnerships have been slow to grow in the past.
Now that the fintech industry is maturing, though, we are beginning to see some companies act upon their understanding of the landscape. This is leading to some interesting partnerships and additional value for all parties. Notable examples this year of fintech mergers include Global Payments and Total System Services, and Fidelity National Information Services’ announced acquisition of payment processor Worldpay.
As these fintech partnerships grow and create more powerful fintech companies, it will be fascinating to see how traditional financial institutions respond.
Equities Contributor: Chad Otar
Source: Equities News
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