4 trends shaping the future of FinTech
Navigating the banking and finance industries is not an easy task. While they’re considered somewhat traditional sectors, they’re constantly evolving. One key area of expansion is that of financial technologies, or ‘FinTech’ as it’s better known. But what is the future of FinTech and how will it change financial services?
Like many professionals, you may be asking these very questions and wondering how FinTech trends could play a part in shaping your future. FinTech harbours an abundance of emerging sub-sectors and there are several applications to get to grips with already: cryptocurrency, bitcoin, blockchain, machine learning and AI to name just a few.
In this blog, we’ll dive into four specific financial technology trends that are shaping the future of finance.
But let’s kick off with a definition.
What is FinTech?
According to Business Student, FinTech is the evolving intersection of technology and financial services. Many start-ups are operating in the financial technologies space, and larger financial institutions are starting to realise the importance of FinTech to create new and improved financial services for consumers and businesses.
“Nearly 82% of financial institutions plan to increase FinTech partnerships in the next three to five years.”
– PWC –
Why is FinTech important?
FinTech can be advantageous for all sorts of companies, including those in insurance, banking, investments firms, asset management and personal finance management. By leveraging technology to automate tasks, they can deliver the same solutions for a lower price compared to traditional services.
Using FinTech applications, people can perform the following tasks online, generally without the assistance of another person:
- Transferring money
- Depositing cheques via a smartphone
- Applying for credit
- Raising money for a business start-up
- Managing investments
In essence, FinTech allows financial institutions to simplify the ways customers manage their money which can in turn improve their financial literacy.
Businesses are always on the look-out for people with an understanding of new trends in finance, so studying a course, such as our online masters in Finance and Strategy with a dedicated unit on Financial Technologies, can ensure you’re equipped for the future of finance and eligible for these in-demand roles.
So, what trends are shaping the future of FinTech?
- Reinvention of customer service
FinTech is currently focused on merging digital trends with customer expectations, which is why many financial institutions now allow their customers to open an account and access their bank completely online – saving them time, travelling costs and inconvenience.
This has meant, for the first time in history, those previously unable to access a bank are now able to. With the invention of mobile banking and digital payments, banks are more able than ever before to re-examine the customer journey against satisfaction metrics and provide customers with what they need.
- A focus on agility
Rapid transformation in the financial sector has heightened the pace of business model innovation. Any business using financial technologies must be responsive to the ever-changing trends in order to meet customer demands and remain competitive.
For example, the use of AI in mobile banking apps will get more advanced over time, and businesses offering these services must keep up with these developments to best serve the customer, while traditional financial institutions are branching out to understand the possibilities of blockchain technology. Those who fail to adapt won’t survive.
- Continuing the fight against cyber crime
The FinTech world operates on digital and cloud computing based technologies, and while these improve customer service and increase the speed of processes, they are vulnerable to cybercrime.
According to Allianz Global, financial services companies are heavily targeted, and typically feature in the top five sectors for severity and frequency of cyber-attacks. With an increasing number of individuals and businesses relying on technology to operate successfully, especially in FinTech to optimise customer experience and ensure swift transactions, cybercrime is rising. Cybercrime is a trend that’s not going away anytime soon, and will have a huge impact on the future of FinTech.
- Smart solutions
The increasing demand for financial services, paired with customers and employees’ lack of time, has forced the banking industry to look for quick, robust and flexible solutions to problems faced and internal inefficiencies.
FinTech has enabled banks to implement efficiencies across all areas, transforming internal processes within financial institutions and in-store experiences for customers.
For example, online loans can now be implemented through an automated service or robot advisors, with no need to book a face-to-face appointment in-branch. This makes internal processes much more efficient, giving employees time to focus on tasks that cannot be automated.
This is a trend that’s only going to grow as the rise of artificial intelligence and machine learning enables businesses to offer contextualised products that meet customers’ real-time needs.
How can I learn more about FinTech?
Is FinTech the future of finance? One thing is certain: the industry is thriving, and its growth is generating an increased demand for experts with their finger on the pulse of financial technology trends and the ways they’re transforming the market.
Our online MSc Finance and Strategy course includes a unit on Financial Technologies, covering the hot topics in FinTech right now and exploring the most promising applications in the market. The unit will teach you to critically examine the impact of these technologies and their potential impact on the future of financial services and the finance and banking sectors more widely.
Learn more about Manchester Met’s online masters in Finance and Strategy and how it can futureproof your career today.