Fintech has been fast on the rise for a few years now, but over the last year fintech has entered the spotlight and has played a major role in the business world and will continue to do so moving out of the pandemic. With this in mind, read on to discover how fintech is helping businesses and what a few of the key trends are looking forward.
So, what exactly is fintech? Essentially, fintech is the use of technology to provide advanced and innovative solutions designed to improve financial services. It is a broad term and can refer to many different products and solutions, such as digital banks, cryptocurrency, alternative lending, biometric security models and machine learning just to mention a few of the more common uses of fintech. Businesses can benefit greatly from utilising fintech and those that embrace solutions such as this can improve in a number of different ways.
Here are a few of the main fintech trends that are likely to emerge in 2021 and beyond.
Rise of AI
AI is finding its way into just about every area of business and can be used in all kinds of innovative ways. In terms of fintech, AI and machine learning can streamline processes for banks and could cut operational expenditures by as much as 22 percent. On top of this, AI could also be used to identify financial fraud and mitigate the effects of cybercrime.
Leading on from this, cybersecurity has become an extremely disruptive force in financial services over the last year and this will only continue as the threats become more advanced. This means that cybersecurity will be a priority moving forward with technologies such as AI, blockchain, and quantum cryptography playing a major role. Additionally, once the pandemic has ended it is likely that biometric security systems will be widely available and a great form of defense against cybercriminals.
Many businesses have sought finance over the last year, which is likely to continue moving forward due to the lasting economic impact of the pandemic and Brexit. Fintech lenders can make much faster decisions when it comes to loans than traditional lenders, plus technology can be used to improve decision-making by lenders.
Blockchain technology has been touted as the future of transactions and an effective way to make bank transactions safe, cut out the middle party and protect data. A major shift to a complex technology will always take some time, but it is likely that the shift will begin to pick up pace in 2021 moving out of the pandemic and will play a major role in the coming years.
Fintech is now emerging into the spotlight and can be used in all kinds of innovative, useful and intelligent ways to improve financial services.