In recent years, fintech has been at the core of the reinvention of banking and financial services across the world. To understand the impact of fintech on this sector, all you need to do is look at developments like Robo-advisory, Insurtech, etc. and the promise they offer.
Looking at the current trends, it is safe to say that fintech is here to stay, and companies that adapt to this changing environment sooner will have a lot to gain. The same can be said about professionals. If they identify this as a prospective segment and equip themselves with the requisite capabilities, then they will soon find themselves in high demand in the industry.
The important thing to remember is to identify the trends before time so that you have the first-mover advantage over your competition. Take a look at some fintech trends that are expected to stay beyond 2020.
#1. Cybersecurity of FinTech Companies
Security is one of the major concerns of financial companies. When we talk about fintechs, the Global FinTech Adoption Index released by E&Y states that around 71% of the people using fintech services are concerned about the security of their data while dealing with companies online.
Last year, Monzo Bank Ltd., a neobank from the UK had to ask 480,000
customers to change their PIN due to some bug in the security system.
While banking fintech is a long-term trend, issues like data breaches and system crashes are not doing much to instil confidence in users. Over the next few years, cybersecurity of fintech companies is expected to grow at a rapid pace.
#2. Reaching the unreached markets
As per the Global Financial Inclusion Report published by the World Bank in 2017, around 1.7 billion adults in the world don’t have a banking account. Half of these are from developing economies like India, China, Pakistan, Bangladesh, Indonesia, Mexico, and Nigeria. Here is a quick look:
One of the biggest trends to look out for in the fintech domain is new fintech companies attempting to reach the unreached consumers. This will open up a lot of new avenues for fintech professionals in India and around the globe.
#3. Big Data Analytics & FinTechs
Big Data analytics has been the backbone of the digital transformation of the world. It includes structuring information and analyzing it to identify trends that help fintechs develop and support innovative products. This analysis also helps fintechs with customer segmentation, detection of fraud, and risk management. Since Big Data analysis has implementation across a wide range of industries, as a skilled data analysis professional, you will never be short on career opportunities.
#4. DeFi or Decentralized Finance
This is one of the most interesting FinTech trends. The core idea behind DeFi is providing a global alternative to every financial service you use today, like savings, insurance, loans, etc. and making it accessible to anyone with a smartphone and internet connection. While decentralizing finance, the role of agents in a centralized process is reduced or eliminated. This is gaining traction with every passing second. Some technologies based on DeFi that you might have heard about are P2P platforms (peer-to-peer lending), distributed ledger-keeping, etc. DeFi technologies are expected to impact all aspects of the financial services markets. If you want to be a part of the re-imagination of digital financial services in the world, then DeFi is where you should be.
#5. Blockchain Technology
Until now, blockchain was synonymous with cryptocurrencies. Smart-contract blockchains like Ethereum allow developers to build sophisticated applications with ease. Blockchain is cost-efficient and highly secure. It allows fintechs to innovate while tracking the entire life cycle of a financial transaction. In developing economies like India, Blockchain technology has already made inroads into applications like KYC verification, credit scoring, digital insurance, supply chain management and financing, remittances, etc. There is a lot of scope for this technology that is set to disrupt the financial services industry around the globe.
The fintech landscape is an ever-evolving sphere that integrates new and emerging technologies with open arms. Over the last few years, there has been a marked increase in the acceptance of fintechs around the world. People have started adopting these technologies to make life easier and simpler. As the industry grows, the demand for professionals trained to take it to the next level of evolution is expected to grow exponentially over the next few years. If you are considering a professional qualification to enter the FinTech industry, then the time is now!