While Fintech or financial technology has been a major disruptive business model of recent times, its full potential is still being realized. Fintech essentially means automation and delivery of financial services with the help of an amalgamation of finance and technology, as the name suggests. Many companies are choosing to opt for fintech solutions now to satisfy their customer base. From convenience to cost effectiveness and transparency, fintech offers it all. What’s not to like?
As more and more organizations are trying to create foothold in this field, more and more technologies are being developed and explored to aid this industry. With more competition comes more innovation. Demonetization and pandemic ushered in the era of technological innovation. Our country has quickly progressed towards a cashless economy. With continuous innovation, in the next 5-10 years, the fintech industry could reach its peak. Let’s look at four technologies that can shape the future of Fintech:
Artificial Intelligence (AI): Companies in the financial sector or even banks can use AI for analyzing data to further improve services provided. AI can also be used to anticipate and manage risk by analyzing data available from various sources. Besides these, AI may soon be able to offer services like approving loans, detecting frauds and suggesting investment options. According to McKinsey analysis, artificial intelligence (AI) can generate up to $1 trillion additional value for the global banking industry annually.
Cloud computing: We all have heard of the ‘Cloud’ right? Basically, it’s a network of servers where data is stored and all you need is an internet connection to access it. What cloud computing can do is make the firms efficient by helping them save costs. Choosing to migrate to cloud systems means choosing serverless architecture. This will help them save time and effort besides cost. If a firm chooses a public cloud provider that supports container technology on cloud, it may help them run several workloads simultaneously saving considerable time and overheads.
Internet of Things (IoT): Yes, we know that we have been hearing about what IoT can do for years now. In layman terms, IoT are physical objects across the world connected to internet and exchanging data. Now, how can IoT help the finance sector? For starters, it can help analyze customer behaviour in real-time and reduce risk factors. It can also help insurers improve customer engagement besides simplifying the claims process. There is so much more it can do, it’s just up to the organizations to figure out its capabilities and apply it to the best of their knowledge for something bigger.
Blockchain: We all know about cryptocurrency! Blockchain is best known for its role in cryptocurrency by maintaining secure decentralized data of transactions. Blockchain is decentralized digital public ledger that uses a technology to record transactions across several computers connected through a peer-to-peer network. In the finance field, something called DeFi is becoming rather popular. DeFi is decentralized finance. It is a blockchain-based finance where smart contracts are used to remove the requirement for a central intermediary.
According to a Statista report, the value of investment in fintech companies worldwide reached more than 225.7 billion USD in 2021. No wonder Fintech is turning out to be one of the biggest industries globally right now. Organizations wanting to enter this sector can focus on opting for fintech solutions. It’s time for more and more companies to embrace technology and choose growth and success by adopting fintech solutions in their respective businesses.
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