Fintech is a result of the digital transformation that continues to disrupt industries in numerous ways and brings in new chances for organizations.
According to Deloitte, the term Fintech refers to computer programs and other modern technologies used by businesses that provide automated and improved financial services.
Investments in the Fintech field have been growing since the latest global financial crisis. Nowadays, Fintech solutions are considered as the potential recovery from the pandemic, as a means to solve some real problems that emerge at present.
The pandemic has also shown that physical proximity is not so important. The digital activities and the fluidity of the information combined together represent success in the future.
Fintechs have already changed the financial industry structure, ways to provide services, and their consumption. They have also influenced customers’ expectations while setting new standards for user experience.
Deloitte reports that investments in Fintech have increased from $12.7 billion in 2020 to $23.4 billion in 2021.
Financial services are poised for transformative change, big corporations and startups alike are pouring money into fintech investments.
They embrace the agility and flexibility promised by fintech solutions to develop innovative financial products that help people manage their money in new ways.
In addition, the rapid adoption of mobile applications makes it critical for organizations to develop ones to bring their services to customers via this channel. Consider fintech trends and use them to reinforce your company’s performance and customer experience.
Fintech Industry Trends in 2021
Statista shows that the number of smartphone users is over 6 billion people worldwide, and this number will grow even further. As a result, the number of mobile application users is also increasing.
For example, according to Statista, 43.1% of smartphone users in the USA in the Q3 of 2020 used banking and financial apps. The figure will continue to rise as fintech app development starts a new phase, using the latest solutions and trends.
Here is a list of fintech trends you should pay attention to in 2021 and further.
1. Artificial Intelligence
Contrary to traditional data analytics and robotic process automation, AI has four unique features:
- It will detect changes in data patterns and tune the model by itself. You do not need a data scientist to keep adjusting the model;
- When the data quality is not perfect, it can still create helpful insights for businesses to make decisions;
- When the data is coming in, we do not need to store, process, and transform it before creating analytics. Instead, it can just stream through the neural network, and the AI engine can pick up the pattern and help businesses serve customers;
- It can handle unstructured data. Therefore, we can apply AI in places like image recognition and voice recognition.
In financial services, the technology can be applied in three major areas. The first one is ML (Machine Learning), to create a propensity model.
Banks and insurance companies put ML on the websites or mobile channels and create real-time target marketing. They actually predict the product propensity of their customers based on their behavioral data in real-time.
The second application of AI is usually around NLP (Natural Language Processing). Some applications like chatbots contract intelligence where the AI can read the free text in a contract and detect non-compliance in the documentation.
The third application is face recognition. For example, many fintech companies ask their customers to take a selfie and a picture of their identity documents.
The machine can automatically match these two and help them do KYC (Know Your Customer) and onboarding.
To have AI work effectively, financial institutions need to have a lot of big data. So, when they have accumulated a lot of big data, many banks and insurance companies can tap into this pool of resources and create helpful business insights.
It is expected that AI and ML will become a more regular practice, specifically in AI-based chatbots development and usage. It will enable organizations to provide instant customer support and enhance their experience.
2. Blockchain Technology
Blockchain is becoming one of the fintech industry trends and is no longer associated only with cryptocurrency. The technology has a lot to offer for financial services and other industries, as its hash algorithm allows secure data sharing across the industry.
With Distributed ledger technology (DLT), banks, corporations, insurance, and logistics companies, etc., can share documents along with the trade flow on a trade finance blockchain network.
With all the authentic documents hashed on the chain, there will be no more forged documents and forged invoices for financing.
Besides, you can also use the hashed information to detect duplicated purchase orders which another bank has collateralized. With that, you do not need to expose sensitive information or customer privacy.
Blockchain also comes with smart contracts. A smart contract allows events to trigger payment transactions automatically.
For example, when the invoice comes in, it will be automatically reconciled with the purchase order, which will trigger the payment for the banks. These are going to improve the efficiency of the ecosystem a lot.
One of the financial technology trends is gamification. Gamification solutions incorporate gaming activities into other fields and industries.
The practice is used to enhance customer experience and increase engagement levels. For example, companies develop different types of personalized programs, quizzes, cashback rewards, educational videos, etc.
Chatbots allow companies to have human-like conversations with their customers. Organizations try to incorporate chatbots into their fintech apps, as they are cost-effective, easily scalable, instantly available to the customers, data-driven, etc. The chatbots in the financial field can be of three types:
- informational (provides general information, news, or push notifications);
- transactional (helps customers to complete transactions);
- advisory (provides information on the next steps based on customer interactions).
The technology has several benefits that include:
- user engagement: a chatbot can serve as a mediator between a company and its customers, providing instant communication;
- 24/7 and scalable: a chatbot can be one of your most loyal employees who is available all through the day and even at night. In addition to this, the technology is scalable and can be easily improved when necessary;
- intelligence advantage: chatbots deliver valuable insights about your customers that you can use for further business development.
Bank chatbots can help your customers check their balance, set financial goals, get spending insights, transfer money, pay bills, etc.
The technology is improving with the help of AI and voice recognition, thus enhancing the performance of the organizations and user experience.
5. Voice Technologies
Another popular trend in the finance industry is voice recognition. Some companies start to use voice-enabled technologies like Siri, Google Assistant, or Alexa, so the customers can use them to make transactions and other operations.
In addition, voice commands will reduce phone calls, so these solutions are to save time, make things easier, and help organizations perform more efficiently.
Fintech App Development: Useful Tips & Main Features
Financial services have to develop innovative solutions and incorporate them into their fintech app to provide high-quality services to their customers, secure personal data, inform about the latest news and programs, etc.
What are the main features that your application should possess?
Main Features Your Fintech App Should Include
- Security: the application will contain sensitive data, so it is essential to provide a secure environment for your customers. Use different solutions for the customers to sign in. For instance, integrate two-factor authentication with face, voice, or fingerprint recognition.
- Notifications: Keep your customers updated about special offers, loyalty programs, news, etc. It is also essential to send out notifications once any transactions are performed.
- AI-enabled chatbots: Make sure customers can instantly receive requested data 24/7.
- API integration: Establish connections with other applications so that customers can get additional helpful information via your app.
Fintech App Development Process
The finance mobile app development process includes the following stages:
1. Define Your Product
You should know the purpose of your application and how it can help your customers. Your team should conduct profound market research to see what is in demand, understand customers’ expectations, calculate the risks, and predict the profitability the solution could bring. Then, use all the available data to design a version of your product.
2. Build a Team/Find a Vendor
Find necessary resources to bring your project to life. You can build your team by hiring professionals individually or use outsourcing. Numerous companies have vast experience in the fintech app field, and they can help you choose the right solutions for your project.
If you decide on outsourcing, pay attention to the company’s portfolio, its employees, read reviews of the previous customers, so you can make the right decision, and be sure that you will get a high-quality product that will work efficiently and bring you advantages in this highly competitive field.
3. Decide on Technology Stack
When you have a team of professionals working for you, you can discuss and choose a technology stack for your application. There are numerous languages to develop apps.
The vendor or your team of developers will help you to choose the right one. It is important here to know your customers and which operating systems they use.
Decide whether you need a native application (that will work only on iOS or Android devices) or a cross-platform one (suitable for all platforms).
4. Create User-Friendly Design
The application should be easy to use and appeal to your customers. Ensure that a dashboard offers all the necessary features and it is not difficult to find essential information.
5. Develop MVP
A minimum viable product is necessary for application development as it will help you run tests before you launch the product. Then, ask your customers to use it and share their feedback with you.
No one but your customers will point out the weaknesses of the application. What is more, you will see what else is needed to be added to the application after tests.
Fintech App Success Stories
Financial software development only starts to accelerate as new solutions come into the fintech industry and prove numerous advantages for organizations.
Some of the companies have already begun to implement solutions to enhance the performance of their organization. For instance, Bank of America has developed a virtual financial assistant Erica who helps make money management more effortless.
Another example of fintech solutions implementation is Lemonade, an insurance company that uses AI, apps, and chatbots to digitize the insurance industry.
We, at Intellectsoft, empower hospitality companies and their workforces with innovative solutions and approaches. Are you and your organization looking for some?
Contact our experts to discover more about the development of applications for your organization and learn how you can get the most of them.