7 fintech and financial services trends for 2020
This decade has seen rapid growth in the fintech industry, and the next is sure to be no different. In this article, Nicholas Harding, CEO of P2P lending platform Lending Works, informs us of the key trends to look out for in 2020.
The big banks have embraced technology and have started to lead innovation again
Fintech is now fully integrated with financial services and can be found in almost every sector, from customer experience to data management and business administration. The big banks have embraced technology and have started to lead innovation again, so they are setting the standard for start-ups and other businesses to match. That means that next year, we will probably see a lot of these smaller institutions starting to provide and perfect a lot of technology that’s already available.
However, there will also be a lot of major changes taking place in 2020, as the rise in fintech continues to accelerate. Below, I’ll be taking you through seven key trends in fintech and financial services to look out for to make sure you don’t fall behind.
AI and robotics
We’ll also see AI and robotics being used in more areas than just customer service. Analytics, risk assessments, investments, logistics and supply chain management can all be automated using this technology to provide a smoother and more efficient process behind the scenes.
Voice recognition
Voice recognition technology will also dominate customer service, with the popularity of smart home devices increasing demand for voice search and hands-free banking. Companies that focus on voice recognition will appeal to customers who seek the convenience of these formats, so it’s worth making sure web navigation and even simple processes can be done via voice commands.
Public cloud services
Financial institutions already use software-as-a-service (SaaS) cloud services for data storage, customer relationship management (CRM) platforms, and human resources. But, in 2020, use of the public cloud could be extended to cover payments, billings, and loans management, including cross-border data exchanges, in what will ultimately be a smoother and quicker experience. However, this could lead to an increase in cyber-security threats, so companies will have to invest in advancements in these areas too.
Emphasis on home-owning assistance
In the last decade or so, financial institutions have had to adapt to millennials and all the ways their financing goals are different to older generations. Millennials are less likely to seek business loans as entrepreneurs, and are instead more likely to seek property solutions, such as mortgages and rent-to-own agreements, and debt management, such as student loan repayment solutions.
Catering to digital-first customers
Almost three quarters of customers choose online banking over going into branch, so accessible banking is a must and institutions are expected to provide and cater for a range of different access points. These customers also favour blockchain-based sharing economies, which are decentralised and focus on finding matches between providers and users of capital, taking banks almost entirely out of the equation.
Security and protection
AI and similar technologies have made major strides in identity theft and fraud prevention, though the security of a transaction still depends on the quality of the connection, the protection of the service, and the regulations of the country they are based in. Cyber security will become even more important in 2020, as customers move away from centralised economies and institutions embrace cloud technology. So, companies should expect to invest in even more protective measures.
Better chatbots
Chatbots and other artificial intelligences are being used to streamline the customer experience and automate processes, freeing up more time and personnel to provide better personalised services where they’re needed. In 2020, there should be plenty of improvements made to conversational banking, as barriers like slang and grammatical errors can still impede their effectiveness. Plus, companies can use data from chatbots gathered in 2019 to achieve more accurate customer intelligence, which should help improve the technology even further.
These are just seven of the fintech and financial services trends you should look out for in 2020. Advancements in these industries have been rapidly increasing in recent years, so it’s safe to assume there’s much more to look forward to in the near future.
