Alessandro Rocco Pietrocola is the CEO of Astorts Group, and is a successful entrepreneur based out of London who operates businesses all around the world including in Eastern Europe, Asia and the Middle East. Alessandro Rocco Pietrocola, shares insights into the 5 biggest fintech trends to watch out for in 2020 and beyond.
Having a strong understanding of the fintech space is crucial for all businesses heading into 2020 and beyond – not just finance or tech related firms. In fact, appreciating the complexity of the fintech industry, including new processes, developments and strategies, is a valuable and necessary tool for all business owners. More importantly, it can be argued with great conviction that innovative fintech solutions will irrevocably change the way businesses operate and function daily.
Here are the 5 most important fintech-related developments of the future.
Digital-only banks are highly competitive and offer customers a wide range of awesome benefits. Indeed, they can provide rapid financial transactions, online banking loans, expense management, quick balance review features, and real-time analytics. Because of this approach, they are clearly customer-orientated, which underpins their competitive advantage. Moreover, many of the market-leading banks are strategically aligning with blockchain technologies, such as Ethereum and Ripple.
As a result, digital-only banks are only growing in revenue and number, revealing to customers that there is more to the traditional banking world than the ways of the past century. Digital-only financial institutions will continue to evolve and grow, encouraging customers to make the switch for more convenience.
Enhanced collaboration between fintech and financial firms
Fortunately, many traditional banks are coming to the same realisation: in order to survive in the current climate, they need to innovate and offer the customer what they want. The ongoing coronavirus pandemic is indicative of this trend, accentuating the importance of fintech firms collaborating with the financial sector in order to provide quicker services for clients.
So, what does this mean for graduates? Well, it can be expected that banks will be hiring more tech-oriented employees, especially those with qualifications in IT and finance. Currently, over 80% of financial institutions are associated with a fintech company.
The importance of AI
While AI has been around for a while, its importance to the fintech space is forecasted to be astronomical. Indeed, AI implementation techniques will be able to combine advanced analytics, big data and distinctive data sources, culminating in new banking methods.
The use of robotics and AI capabilities can assist with natural language processing, logical reasoning, social and emotional intelligence, identification of patterns and self-supervised learning, mobility and navigation. Voice recognition is become more common in the corporate world, not just with the banks.
When it comes to finance, AI could reduce bank operating costs by 22% by 2030, enabling banks to offer customers convenient, reliable and safe services at a lower cost. There are consumer lending platforms that are increasingly integrating interactive machine-learning and banks are even using AI to smooth customer identification and authentication. Most financial organisations are incorporating dialogue mechanisms into their account inquiries, enabling customers to complete their transactions using voice commands. Soon, customers could be completing all their bank-related tasks and payments via voice commands, including transfers, opening new accounts and extending credit limits.
Advanced security will be a necessity
As fintech usage evolves and grows more common in many sectors, so too will the need for enhanced, flawless cybersecurity. Cross border data sharing and other data activities validate the need for financial institutions to be safe from cybersecurity attacks or threats. The recent Cambridge-Analytica scandal is a testament to this, particularly in terms of demonstrating how private some people are about their data and how outraged they were at the violation of trust and privacy.
Consequently, another big trend in the fintech space is simply corporate governance and ethics. Established fintech entities will need to have strict governance standards and transparent policies when it comes to managing, securing and storing private data and information.
China will likely dominate
A large chunk of fintech growth has occurred in its global hub – China. This is hardly a surprise, since China lead the world in eCommerce, with a total market contribution of $740 billion. For example, the Bank of China works with Tencent and its messaging platform WeChat. These services have helped enhance the scalability of card-less payments throughout the Asian region.
Having said this, there are two things that could threaten China’s dominance in the fintech space. The first one is India. Much like China, India has an incredibly large labour force and innovative IT space, which if utilised for fintech functions could seriously threaten China’s monopoly. The second aspect is how the world will react to the coronavirus pandemic, which originated in China. We’re already seeing many countries begin to shift their economic activities away from China, such as Japan and the US. This could damage China’s growth in this space.
At the end of the day, fintech solutions have had huge success in terms of growth. They have effectively revolutionised the financial sector, creating new industries and jobs along the way. Further competition in the sector will only serve to reinforce job and industry expansion. As the world moves towards a digital era, fintech is clearly leading the way.