Note: This is a guest blog by Jin Markov from Goodfirms
Cutting-edge technology defines trends in most business sectors nowadays. The success of your business model depends on how open you are towards adopting technological advancements.
Everyone would agree that finance is one of the most crucial functions of any business. Ultimately, the aim of all businesses is profitability, financial gain, and growth. Technology is now an indispensable part of any business activity. The use of technology is making business processes simpler, operations faster, and customers more approachable.
It is famous to quote:
"The major winners will be financial services companies that embrace technology."
– Alexander Peh, PayPal and Braintree
So, financial technology, commonly known as Fintech, is all set to welcome the emerging technologies in 2020. Here’s the top global fintech trends we can expect:
1. Blockchain in Fintech will make payments fool-proof
Blockchain technology is the most significant fintech turning point of the decade. And, it will continue to shape the future of fintech in 2020.
Decentralization helps manage the speed of financial transactions. In the absence of an intermediary, the transactions are faster. As the blockchain network is speedy and decentralized, it is also easily scalable.
Remote work trends are growing all over the world. Blockchain will benefit freelancers and remote workers, as well as, the businesses that want to work with them by making fool-proof smart contracts.
Blockchain will also enable automatic and staged payments for remote and freelance work. Task-based agreements can be easily executed as blockchain will release the payment to the provider after a service or product is delivered. This will increase trust among service providers and service seekers across the world. When remote working increases, it will boost the economy of many countries.
A highly secure blockchain will provide the safest ways of instant payment for products and services.
In short, the most prominent benefit of using blockchain in fintech is that each transaction is well encrypted. Hence, the security of data and network is ensured. To finalize a transaction each stakeholder in the system approves the transaction, leaving no possibility of hacking or damaging the record.
Moreover, tokenization in blockchain will manage international money transfer without the need of a specific currency. This will make cross-border transactions hasslefree.
A survey by GoodFirms concluded that transparency, immutability, and reliability are the three crucial benefits of blockchain. The financial sector will definitely leverage these digital transformation in 2020.
2. Conversational Banking will dominate customer support
Conversational banking is the voice and text interaction of the customers with the bank to meet their banking needs. Busy customers don't want to visit the bank branches or wait for email replies. Therefore, to be able to serve their customers digital banks are widely using conversational banking.
Fintech companies are competing to provide the best customer experience in banking with the use of voice technology. Chatbots have been popular for years, but the AI-enabled bots are smarter as they learn from customer interactions. This is called machine learning, which is being widely done in the Python programming language.
Moreover, machine learning empowers the voice assistant to converse with the customer exactly the way a human chat assistant would. Based on past interactions or data analysis, it will also give personalized, consistent, and customized experiences.
As machines are becoming more intelligent, the voice support assistants are becoming perfect for live chat support for mobile banking customers. AI in fintech will help conversational banking grow, giving customers more ‘human’ interactions.
To conclude, conversational banking using AI relies on predictive analytics for real-time responses. It can intelligently solve customer queries and help him in decision making. Hence, the bot can be cloned and customized for different locations.
In 2020, conversational banking assistants are expected to dominate the fintech trends.
3. Proactive Banking with omni channel engagement would be popular
For long, traditional banks and financial institutions have followed a reactive approach. However, to go the extra mile for their customers, banks must now switch over to proactive banking.
The customers needs to be informed of their account balance when they make an intent for purchase instead of later. Banks must also remind the customers of any payments scheduled in the upcoming period to help them plan expenses accordingly.
The next step in proactive banking would be omnichannel customer engagement, where the channels are connected and share customer data. This is useful to provide the customer with quicker channels for engaging with the bank. It will also facilitate easy feedback collection from any channel preferred by the customer.
4. Robotics will influence Fintech supply chain
Every industry is influenced by robotics. In 2020, the power of robotics is expected to spread to the financial sector as well. This will reshape business analytics by tracking the financial processes and bifurcating useful information into different segments for processing. It will then also help business intelligence by offering quick and data-backed solutions.
Fintech’s influence on business intelligence will eliminate the crucial challenges by reducing delays in financial decision making. It will also make financial decisions more structured and experience-driven. Furthermore, AI will contribute to predictive analysis for business risk management.
The financial sector has critical supply chains. Robotics in the commercial supply chain will ensure speed and productivity. It will enhance the customer base by increasing scalability.
Moreover, automation will reduce weak-links from the supply chain by eliminating the number of steps and people involved.
5. Cloud-based financial services will spread
Businesses are going global. Particularly in the software, web, and app development businesses, many choose to hire talent globally.
However, international financial management is not easy; it has too many limitations. The problem is grave, mainly due to the constraints across the borders.
The cloud-based software-as-service model is expected to grow in the finance sector. It will enable cloud payments, facilitating secure currency exchange, and international payments. This will encourage global or multinational businesses to transfer money conveniently, irrespective of the borders.
A lot of research is being carried out to make the cloud-based financial services secure. As a result, we have reached significant milestones, such as the Secure Transaction Cloud services. Tokenization and encryption are further supporting the initiatives. We can now expect secure clouds to spread over the complete international banking system.
Fintech, one of the most prominent among business technologies, is expected to see massive growth in 2020. Thanks to innovation and cutting-edge technologies, the financial sector is welcoming significant changes. Fintech startups are changing the banking demographics.
From increasing efficiency to profitability, and ultimately long-term customer trust, fintech will revolutionize the financial sector like never before.
Jin Markov is a Content Writer with GoodFirms, a research firm in the USA. He has expertise in writing on cutting-edge technologies.
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