There’s no getting around the fact that technology has profoundly impacted the lives of nearly everyone living in the modern world. From the way people interact and keep in touch with one another to how purchases are made and information is accessed, the influence of today’s technologies can be seen practically everywhere. This is more true of finance than perhaps any other sector, with FinTech innovations leading the way toward a more secure and eventual cashless society.
Here are just a few ways that FinTech is disrupting the big bank industry, all of which are likely to continue impacting the future of global finance.
FinTech is Shaping Customer Expectations
One of the most common complaints faced by today’s big banks is that customers simply don’t feel in control of their banking experience. Between spending hours on the phone waiting for a live customer service representative to dealing with hefty fees (overdrafts, etc.), many customers have grown disillusioned by the big banks and are looking at alternative options. FinTech businesses are fully aware of these pain points and have utilized digital channels to address the growing need for speed, low pricing, flexibility and convenience in banking. The focus on offering streamlined financial services is further shaping a growing customer demand for something “new,” which is just one reason why FinTech solutions are here to stay.
Cryptocurrencies and Blockchain Technology Are in Their Infancy
While blockchain technology may have been created by Bitcoin conceptualist Satoshi Nakamoto a decade ago in 2008, most people never heard the term before the cryptocurrency made news during its skyrocketing value boost in late 2017. Thanks in large part to intensive media coverage, bitcoin and other cryptocurrencies have become en vogue and are no longer topics of fringe discussion. Crypto and blockchain may have seen a surge in popularity, but most prominent players in the FinTech space agree that these technologies are very much in their infancy at the moment. There’s still a long way to go until mass adoption occurs, which translates to exciting new frontiers for FinTech pioneers to explore and share with the world.
P2P Lending is Changing the Industry
P2P (“peer-to-peer”) first gained prominence as a term in the days of Napster, where users (re: “peers”) would trade music files between one another without the need for an intermediary server. While the technology has shifted in a multitude of different directions over the years, one of the most unique examples of how it applies today can be found in lending. P2P lending is a growing sector of the market that appeals to those who may be in search of alternative solutions to big bank loans, such as consumers who would prefer not to deal with strict lending standards or are operating with a low credit score. While it may not quite overtake the lending industry entirely, P2P lending is being taken seriously as a disrupter and is growing rapidly.
Mobile Payments Are Eclipsing Cash and Cards
Just about everyone carries a smart phone around with them these days, so why carry cash, debit or credit cards? Right now, doing so is still somewhat of a necessity, but it won’t be this way for long. Mobile payments on Android and iOS devices are changing the ways people make purchases, from NFC at the checkout line to purchasing products in advance while sitting in the comfort of one’s own home. The security and convenience of mobile payment platforms are obvious perks to moving away from cash and cards, and as the technology builds upon itself, mobile payments will inevitably become faster, more secure and the ultimate in convenience.
AI Fraud Detection Will Eventually Surpass Human Ability
One doesn’t have to look far to see the implications of machine learning and artificial intelligence (AI). Virtual assistants such as Google Assistant, Alexa and Siri have changed the way people move throughout their days and are constantly learning from user input and feedback to become better, more efficient products. It should come as no surprise, then, that AI is also being implemented by many FinTech companies as a tool for eliminating the risk of fraudulent activity and identity theft. Fraud plays a major role in consumer banking, and none of the big banks can claim immunity to the issue. While there’s still work to be done, machine learning and AI-led fraud detection will inevitably surpass the work of humans alone in terms of speed, accuracy and effectiveness.
FinTech Will Continue to Change How People Build Savings
The importance of building a respectable savings for the decades to come is more pertinent than ever before and can significantly affect a person’s ability to enjoy a comfortable retirement. While personal savings rates tend to remain steady from year to year, many people struggle with either the lack of yield associated with big bank savings accounts or putting their money away altogether. FinTech is changing all of this. Many online banks, for example, offer much higher yields than larger, brick and mortar alternatives, adding incentive to moving money into a savings account that may not otherwise exist. There are also apps—Digit and Qapital come to mind—that periodically transfer small amounts of money between personal checking and linked savings accounts automatically. The end result allows the user to build a savings account without actually feeling like they’re dipping too deeply into their checking—a mental block that can be dangerous for those who struggle with financial worries.
At True North, We Turn Ideas into State-of-the-Art FinTech Solutions
Years spent helping financial services companies reach new heights has been instrumental in refining our best practices for FinTech software development. This allows us to assess your specifications, advise you on the best and most cost-efficient strategies to achieve your vision. We do a deep dive into the strengths of your product and determine the best ways to improve its design and functionality. Whether it’s platform-specific or a cross-platform solution, we are here to back you on your road to success. Contact us today to learn more about how we can help take your offerings to the next level.