If there was ever any doubt that a fintech revolution is underway, that time is gone.
Just take a look around you, and it's clear that financial technology is disrupting the traditional financial services industry. By embracing the latest technological innovations, fintech startups have been able to provide users with a degree of convenience that banks and similar institutions have yet to match.
This trend will continue as fintech companies continue to make use of new tools and techniques. The following are some of the more significant fintech trends that are likely to develop in the near future.
1. The Rise of Mobile Trading
Mobile fintech apps like Matador have ushered in a new age for anyone who has ever wanted to invest in the stock market. By jettisoning the brick-and-mortar offices of traditional invest firms, these services allow users to invest without having to pay broker fees. This makes it much easier for people with limited capital to make investments.
It’s highly likely that existing firms will also begin developing their own mobile strategy and software to facilitate easier mobile trading.
2. Increased Collaboration
Financial technology is disrupting an industry full of established practices. Strategic people working for traditional financial institutions recognize that collaboration with startups will be key to their survival.
If banks do partner up with fintech companies, everyone wins. The startup brings a fresh, convenient approach to financial services.
Meanwhile, the bank has the experience to help them navigate the regulations that dominate the financial services industry. This allows startups to release their products more efficiently.
3. Blockchain Technology
Although it’s only about a decade old, blockchain technology is poised to have a major impact on fintech. That’s because it allows banks to create digital ledgers that record transactions in real-time.
This ledger is accessible to anyone in the community. As such, it will boost the overall efficiency of processes like international wire transfers. It’s simply going to be much easier for banks to confirm where money is coming from and where it’s going.
4. Efficient Transactions
Fintech development companies often strive to reduce the friction involved in a transaction. For example, consider Amazon Go, the e-commerce company’s brick-and-mortar project. Allowing customers to simply walk into the shop and walk out with their goods (the transaction is processed digitally) offers tremendous convenience to users.
That being said, while people may enjoy the convenience of frictionless transactions, they need to be more careful when making purchases. Otherwise, they’re likely to suffer from buyer’s remorse. It’s easy to spend more than you planned when buying something is a one-step process. The same rule applies for investment and other financial-related activities.
5. Increased Lending
Amazon recently announced that they’ve already loaned over $1 billion to their merchants via their lending department. As such, companies like Amazon have a lot of data about their merchants, thanks to the nature of digital connectivity. Thus, it's easier for them to assess whether or not it’s safe to lend funds to a merchant.
Other companies are following suit in this fintech trend. This helps individuals and organizations who might not qualify for a bank loan acquire the funds they need to grow their own businesses. Increased lending via fintech services will likely have a substantial impact on the entire economy as small businesses gain more opportunities to thrive.
As with any technological revolution, it’s not entirely possible to predict all the innovations and fintech trends we can expect in this industry. However, these five represent some of the most likely financial technology developments we can look forward to in the near future. Very soon, they’re going to reshape the way virtually everyone spends, saves, and invests their money.