#fintech Archives

Top 23 FinTech Trends to Watch Out in 2020 -2021

Posted on 14/04/202107/06/2021 by Anteelo Master

For the past few years, many variations of fintech trends have emerged with the implementation of cutting-edge technologies and tools. Various fintech subdomains have come into the limelight, while many banks and startups have realized the effects of fintech on businesses and changed their traditional processes.

However, this is just the beginning of a revolution.

In the 8 months lying ahead of us, many fintech trends are expected to come into the limelight. Numerous standardization and regulations are anticipated to immerse the fintech industry with new enjoyment and excitement, and make the market worth $309.98 Bn by the end of 2022.

Wondering what are these top fintech trends for 2020?

How will these trends revolutionize the future of fintech?

Let’s catch up here quickly.

20+ Fintech trends you must act on in 2020

1. Focus on unserved and underserved

According to a report by the World Bank, around 1.7 Bn people are not a part of any formal financial system. They do not have any bank account of their own, a few reasons behind which are:-

60% of people do not have enough money,
30% of people never felt the need of a bank, and
26% of people find accounts as an expensive affair.

This is the foremost area where the fintech leaders are focusing this year. Rather than entering the established market, the fintech startups are trying to enter new phases and win financial backing from investors this year. They are seeking innovative ways to communicate with people from different walks of life, understand their financial challenges, and come up with better funding opportunities to ultimately drive customer loyalty and profits.

A clear evidence of which is Uber.

On discovering that around 60% of their drivers lay constraints on their banking accounts 6 times a month, and send 25% of their earnings to their native countries while suffering from high fees, the company launched its fintech division – Uber Money. This enables the targeted audience, i.e, drivers and other freelancers to get real-time income, save a big share of each trip, and get better functionalities of bank account, debit card, and mobile banking application.

2. Automation and RPA

Robotic Process Automation (RPA) is also one of the trends that will revamp the fintech ecosystem in 2020.

These bots will not solely continue to automate human repetitive processes, but also lower down common errors and inefficiencies, which will ultimately enhance productivity and ROI.

3. Reduced use of physical money

Another trend that will indicate higher use of finance technological services is decline in the use of physical money.

In 2016, only 1% of the transactions made in Sweden were using cash – a prime reason of which is that many businesses denied accepting cash payments. Likewise, the United Kingdom recorded the highest volume of cashless payments, i.e, of €10.67 Bn in 2017. And now, in the year 2020, this value will accelerate with the usage of more convenient solutions like contactless payments via NFC.

4. Continual development of Open Banking

One of the top banking and fintech trends for 2020 and beyond has to be Open banking. It leverages APIs that allow third-party developers to develop apps and services around the financial institution, in order to help users enjoy the online banking service via multiple platforms.

According to a Deloitte study, around 22% of banks have already deployed their own API platforms, while 39% are working on it. And many more are anticipated to enter this sector.

5. Implementation of Voice-Search

The fact that by 2020, almost 50% of all searches will be voice-based on the Internet, is enough to give you a hint of the future of fintech and the role it is playing in transforming the banking and finance sector. Voice-based search in banking software will assist customers in easily accessing banking services, provide ways of encryption while supporting communication with NLP-powered voice assistants.

More and more industries and banking institutions are adopting voice search- one of the latest technologies used in fintech, and why wouldn’t they when it can save up to $3 billion.

6. Decentralized Finance

Decentralized Finance (DeFi) is also one of the emerging trends in the finance industry.

In 2020, companies will rely upon different set of technologies such as distributed ledger technology (record-keeping decentralization), Internet of Things (IoT), Big data, online P2P systems (risk-taking and decision-making decentralization), and Edge computing to offer monetary interactions in a more decentralized manner.

This fintech trend has already been transforming the payment and settlements. And, in the coming years, it will also change the way capital markets, lending, and trade finance operates while ensuring advantages like enhanced speed, lower cost, and higher transparency.

7. Upsurge in mobile apps usage

Not as surprising as others, mobile apps are also gaining popularity in the fintech industry and have proved potent for becoming a trend. With the incessantly growing popularity of mobile apps, many fintech companies have started to tie up with the best banking & finance app development company in order to create impeccable digital solutions. There are all kinds of innovations waiting around the corner which we will see throughout this year.

8. Next-gen digital-only banks

A rapid increase has been witnessed in partnerships among Fintech companies and banking institutions, promoting the emergence of new financial intermediaries. Now, Digital-only banks are gaining unprecedented popularity, something that was not anticipated in this decade at least.

With an additional time economy option, these Digital-only banks offer an even more diverse array of services to their customers. No wonder, Digital-only banking is going to be one of the top fintech trends for the year, because of its connection with disrupting technology like Blockchain and cryptocurrency.

9. Improvement in Conversational banking

According to a study by Accenture around CUI (conversational user interfaces), it has been found that –

64% of people prefer interacting via messages or emails over calling,
64% users are more likely to buy or hire a service if they have chatted with the brand earlier too.

Because of this, banks and fintech organizations will emphasize more on conversational banking. They will come up with AI-based chatbots and other software that interacts with users on different messaging platforms like Facebook messenger and WhatsApp.

10. Higher downloads of Digital wallets

Digital Wallets are effectively on a way to eradicate fiat money from the wallets. In fact, in a report by Grand View Research, it was revealed that the digital wallet market size was valued to be USD 16.65 Bn in 2013 and is predicted to reach USD 7,581.91 Bn by 2024.

Alone in 2018, the number of digital-wallet users was 440 Mn and has surely increased in 2019 and will continue to do so in 2020. To support this statement, look at the graph below depicting the rise in wallet users.

11. Application of AI and ML-powered chatbots and automated customer services

A generally accepted statement – AI is our past, present, and future clearly shows how humongous this technology is going to be, changing the face of every industry, including Finance and banking.

As per AI technology trends, the market size of AI in the Fintech market is predicted to increase from $959.3 Mn in 2016 to $7305.6 Mn by 2022, at a CAGR of 40.4%.

The technology, this year, is going to provide better services to everyone in the form of –

Chatbots

These are increasingly becoming a choice of financial institutions for customer support services. You ask why? Well, these chatbots in fintech domain are available to the customer 24X7 without incurring additional monthly expenses. They leverage the advancements of ML algorithms and NLP (natural language processing) to serve customers in all possible ways.

Another thing is that chatbots are incredible for enhancing customer engagement. Some of the chatbots used by popular banks worldwide are Ceba (Commonwealth Bank Australia), Erica (Bank of America), and Eva (HDFC Bank).

Customer Intelligence

AI-based customer intelligence is something financial bodies are gaining more and more interest in. It is because customer intelligence helps these institutions to have a deeper understanding of users through their banking relationships and transactions by analyzing data gathered via technology. Some organizations have already started implementing it in their analysis process while many will follow suit in 2020, making it a notable Fintech trend for 2020.

Regulators using AI to predict potential issues

In the year 2020, we may encounter changes in the way regulators perform certain actions. Since AI is prominent as of now, they are bound to turn to AI’s algorithm, data gathering, and analytics tools to compare scenarios and predict probable issues and risks.

12. Introduction of Blockchain in banking and fintech solutions

This year, the role of Blockchain in the fintech sector will reach to the next level. The technology will bring disruptive changes to the fintech industry, making the market valued $6,700.63 Mn by the year 2023.

Many terminologies like the ones described below will go mainstream this year:-

Smart contracts

Without a doubt, a boon for the finance industry, Smart contracts (a decentralized financial technology) are quickly gaining popularity. They are an evolution of pen and paper contracts – more effective, more secure, and of course, immutable.

Wonder how they work?

Let’s take an example-

In smart contracts, parties sign smart contact by using cryptographic keys (digital signature as you will). Now, instead of using pen and paper, the contracts are encoded in computer language. And these codes are virtually tamper-proof, hence immutable contracts.

Crypto-To-Cash Conversions

Cryptocurrencies are becoming more prominent every day and institutional investors are expected to show their interest in cryptocurrency adoption. And this all is a result of new initiatives that have emerged to increase their real-world implications. New advancements may surface in 2020 targeting crypto-to-cash difficulty and may give us what we are looking for.

In fact, many digital-only banks or the banks collaborating with Fintech are already actively considering the possibility of cryptocurrency implementation in order to perform money operations.

13. Incorporation of Big Data in fintech processes

The impact of big data technology on financial services is yet another thing that will be taken into consideration this year.

Big Data is one of the effective tools that fintech market players employ to circumvent the incumbents and revolutionize the industry. On a broader scale, the technology is helping fintech companies grow in numerous ways, including:-

Customer segmentation

With core focus on users’ convenience, fintech startups divide their target user base on the basis of different factors such as age, gender, location, online behavioral patterns, and economic health to determine their spending habit and build highly-customized and personalized offers and financial products.

Risk management

Predictive analytics is a robust tool that offers risk management and enables companies to avoid poor debt expense or make better decisions related to crediting. Fintech startups mine data to create risk profiles of consumers applying for financing to detect bad payers or poor investments.

Fraud detection

With the help of big data engines, fintech companies will be able to gain a better understanding of the consumers’ buying habits and online patterns which can further help with detecting and forbidding suspicious behavior more accurately and quickly.

14. Advent of Co-browsing

The screen-sharing is generally the function where one party gives access to another party for sharing the device’s screen. With the help of co-browsing, users will be able to prevent others from gaining complete access to the device. Instead, it lets users share a particular web page with another party for mutual access. Something that is a boon for the finance and banking sector, as it is very useful in banking software.

With co-browsing intuition, representatives can easily assist customers with issues pertaining to the completion of bank formalities and documentation, to name a few. This is what makes it one of the banking tech trends for 2020.

15. Disruption of Payroll process

Around 59% of consumers struggle from paycheck to paycheck in the USA alone. This situation has created serious money concerns for many individuals who rely on payday loans or predatory lenders asking upto 400% rates for a two-week credit; making one of the financial technology trends of 2020 and beyond.

With the help of fintech companies, other organizations are improving the traditional ways of payroll. Companies such as Gusto, which has been valued at $3.8 Bn, have introduced a flexible Pay feature that allows employees to pick a date to receive their payroll. Another example at hand is the Earnin app allowing users to get access to their earnings before their scheduled payday.

16. Growth of Asian market

The Asian market is rapidly becoming the biggest adopter of Fintech. As new Fintech companies start to emerge, we can expect great advances in the Asian market.

On analyzing the events of 2019, it was noted that China has emerged to be the global leader in the Fintech industry. With the world’s biggest population, the country has 800 Mn internet users – a combined percentage of countries like Mexico, Japan, Russia, and the US.

17. Enhanced ‘A’ rated life insurance carriers

Another financial service technology for 2020 related to insurance is the ‘A’ rated life insurance carriers. Now, the institutions will employ technology in a way as to eliminate the medical exam while simplifying the writing and underwriting of a new life insurance policy.

Some of the fintech startups are implementing up to $1 million of term coverage without any medical exam and only refer to the data collected on customers regarding the prescription history based on their medical questionnaire for passing approval.

18. Public cloud to be the new infrastructure model

Even now, many financial institutions seek help from cloud-computing for an array of work and processes. They use cloud-based SaaS apps for things that may be deemed non-core like HR, CRM, and accounting. The core service infrastructures in areas including consumer payments, credit scoring, and statements are going to become utilities by 2020.

19. Cybersecurity as a pillar of fintech domain

Since everything is online now, there is a rapidly increasing threat of cybercrimes, something which all financial institutions, among others, want to avoid at any cost. In this case, there have been many advancements in this segment developing robust security systems to creating next-gen tools for data protection.

Cyber risk analytics has also merged to be an interesting implementation of AI in Fintech to detect probable threats. With what we have witnessed so far in 2019, it is without a doubt that improving cybersecurity is going to be one of the top Fintech trends in 2020.

20. Rise of Financial regulations and Regtech companies

With consumers having concerns over data sharing with unknown third-party firms, the rise of RegTech firms and financial regulations will also be one of the fintech trends for 2020.

Currently, around 15% of the workforce of the entire financial sector is engaged in tasks around ‘compliances’. But, in the coming years, more regTech solutions will come into the limelight; offering finest services like compliance verifications, transaction monitoring, risk management, ‘Know-Your-Customer’ (KYC) or ‘Anti-Money Laundering’ (AML) practices, and more. And eventually, make the market size grow from $10.6 Bn in 2017 to $53 Bn by the end of 2020.

21. Partnership and collaborations will be on the rise

Partnerships and mergers among fintech companies are going to be one of the top fintech trends for 2020, according to Kathleen Craig, founder, and CEO of HT Mobile Apps (a fintech company). Startups and small organizations are coming to the realization that partnerships are more profitable.

More so, till now direct-to-customer fintech companies have been stuck on a particular piece of the market, but with these mergers, we can see a whole new spectrum of services they together may offer.

22. Sharing economy will become integral

What started with cars, taxis, hotel rooms, etc.will now expand its horizons to include financial services. The sharing economy is expected to become a huge Fintech trend for 2020.

Here, the sharing economy pertains to decentralized asset ownership and the use of IT to obtain suitable matches between providers and users of capital, instead of turning to a bank as an intermediary element.

23. Establishment of On-demand insurance economy

The on-demand model has become one of the most in-trend concepts of this decade and will continue to do so in the coming one. In fact, on-demand mobile app economy statistics are legit proof of its popularity.

Just like you can get a taxi on-demand via apps like Careem and Uber, you can also avail insurance in a matter of minutes. Financial institutions have started to offer insurance facilities via mobile apps. Customers can easily apply insurance for real estate, car, and other belongings, simplifying and making the whole process more efficient.

While these are the trends that are forecasted to change the landscape of the fintech industry between 2020-2025, many more are expected to join the league. In such a scenario, it is advisable to visit this blog again in the future and get familiar with more disrupting fintech trends for 2020 and beyond.

Continue reading “Top 23 FinTech Trends to Watch Out in 2020 -2021”

Role of Technology In Changing the Future of Consumer Lending

Posted on 18/08/202009/06/2021 by Anteelo Master

Dive into the many changes that now stare at the lending-centric consumer financial services landscape and how technologies are fueling the shift. Every once a decade, technology innovation and customer demand merge in a way that drastically changes the consumer-facing financial service sector.

For instance, when The Motley Fool, eTrade, and Intuit came into the market some decades ago, consumers took it upon themselves to personally manage their finances and invest their savings in places that would get them maximum returns.

In 2021, the financial service industry is again staring at disruption. A number of technological and economic factors have developed a perfect situation where people are deciding how they want to manage their pay, pay for services and goods, finance a car or home, or even how they want to borrow.

To answer these changes and shape the future of lending, a number of tech-driven consumer-facing financial services companies have entered the market to address this consumer behavior shift. The entrants have become the reason why lending has become one of the most profitable finance app ideas.

In this article, we will be diving into the many changes that now stare at the lending centric consumer financial services landscape and how technologies are fueling the shift.

What is Contributing to the Evolving Landscape of Digital Lending?

The changing space of digital lending transformation is bringing a remarkable shift in credit analysis and bank loans. The rise of technology progress and big data has led to a series of alternatives coming into the market questioning the credibility of credit score – a prime factor driving the lending industry.

When we dive into the changes that are taking place in one of the slowest transforming financial services, we can find four factors fueling the digitalization of the consumer financial services space –

Changing consumer behaviors – especially the COVID-19 driven behavior
Rapid technological changes
Changes in compliance and regulations
Innovations happening in the space of simplification of operating models.

The combination of these four factors has given birth to a time where consumer insights are blended with product innovations to make fintech consumer lending a lot more inclusive. In addition to serving only the high credit-worthy consumers, the future of the credit industry is now powered to involve consumer segments with low credit history (low-income households, students, freelancers, etc.).

The digital lending landscape has grown to an extent that it can now be categorized into three sectors –

The ultimate aim of the technology-induced digitalization innovations happening in the sector – across the three subsets – is to digitize the entire customer journey (from KYC to reporting) at speed and at scale at a level where the traditional lending system could never reach.

How is Digital Lending Changing With Technological Advancements?

1. A new way of vetting applicants have come on the surface

New credit mechanisms are building on the proposition that traditional ways of applicants’ approval on the basis of FICO credit score is an incomplete sign of applicants’ creditworthiness.

By using artificial intelligence, new models are being developed. These models factor in information surrounding thousands of data points like employment history, education details, and spending habits to verify if an applicant will be able to clear the debts on time. On the basis of these insights, a new credit score is coming to the surface as the future of consumer lending.

2. AI-backed strategy and sales streamlining

Digital lenders have started asking their partnered fintech app development companies to use machine learning for enhancing loans by making underwriting decisions. The algorithms can help validate if the applicants are telling the truth about their income level.

The process is best suited for people having an insufficient credit history, less income, or anyone who is charged higher interest because of the lack of financial data. Machine learning is also being used heavily for its ability to detect fraud through analysis of customer behavior backed by the time they spend answering applications’ questions, looking at the price options, etc.

3. Blockchain eliminating the need for intermediaries

Through the mode of blockchain, digital lending companies can develop a high trust, low-cost platform. With the complete loan process existing online, people will be able to keep a record of documents and transactions on an anonymous digital ledger platform thus eliminating the need for third parties and intermediaries.

4. Cloud computing solving digital lending sector uptime concerns

The most common corners of the lending sector are – security, storage, and 24*7 upkeep time. Cloud computing solves all these issues in addition to offering a series of additional benefits like

Secure connections
Cost-effective and time-efficient management
Disaster recovery
Simplified online processes
Automation of processes

While these technologies are playing a key role in bettering the state of digital lending, what is important for the sector to keep evolving. A way the sector can keep getting efficient is by knowing the trends that are waiting for them in 2021 as the future of consumer credit.

Digital Lending Market Trends 2021-22

1. NLP will better customer experience

Smart lending systems will be using NLP for recognizing and understanding customers’ questions and converting them into actionable data. There are multiple applications that the digital lending companies will be experimenting with in 2021 –

Lenders will be able to offer advice to basic queries through a chatbot
They will use the technology for analyzing customers’ feedback, getting insights that can help them improve the customer experience.
Analyze the data to better the credit scoring accuracy

2. Regulatory sandboxing

While the consumer lending sector needs constant innovation in order to develop and grow, it also needs regulation for ensuring security, safety, and ethics. Sandboxing is how both factors can be respected in the modern lending system.

It is the mode f testing innovative services in a controlled setting for the regulators to conduct their assessments before a complete rollout. The Compliance Assistance Sandbox (CAS) Policy, announced in 2019 highlights the process.

“After the [Consumer and Financial Protection Bureau or CFPB] evaluates the product or service for compliance with relevant law, an approved applicant that complies in good faith with the terms of the approval will have a ‘safe harbor’ from liability for specified conduct during the testing period. Approvals under the CAS Policy will provide protection from liability under the Truth in Lending Act, the Electronic Fund Transfer Act, and the Equal Credit Opportunity Act.”

3. Greater omnichannel capabilities

Technology will be seamlessly connecting the lender with borrowers through a self-service holistic digital experience. The year will see borrowers picking up on the half application form which they started on their phone, on their laptops.

Omnichannel capabilities that make it easy for them to jump from one platform to another without any shift in experience is what would help the digital lenders rule the year while becoming one of the key mobile app development financial services.

4. Non-banking institutions will continue entering the space

We have already seen Amazon offering loans to small businesses and Apple announcing its credit card. All of these innovations are the advanced stages of companies’ capabilities and how they help their customers reach their goals.

The year will see the consumer finance market getting introduced with a greater number of P2P consumer lending organizations. Backed by the abilities of new-gen technologies like Blockchain and AI, consumer financing companies will be giving banking institutions tough competition.

Now that we have looked into the many ways consumer lending businesses are getting prepared to rule the sector through their partnership with a skilled fintech application development company, let us close the article by looking into some ways you can become the next big digital lender.

How Can You Become a Digital Lender?

There are a number of brands that have placed themselves in the future of the consumer financial at the back of their digital inclination.

Shifting from a traditional lending mindset to a digital bank-oriented one is not an easy task. There will be resistance to change, an unacceptance towards risk, and other things. A digital bank transformation will require a strategic foundation supported across all organization levels. As a lender, you will have to focus on offering an exceptional digital experience to your consumers. The last thing you would want is getting axed by Google on the Play Store at the back of a bad experience and lack of regulations-compliance assurance. Here are some things that we recommend on the basis of our extensive skill set as a financial software development company –

Provide transparent information on the approval guidelines
Develop new training material, gen-z inclined communication about new policies
Provide alternate channels to your consumers. Don’t force them to visit branches.

The secret sauce of your lending business success will be transparency and communication. The more open your business is, the more will be the chances of your consumers to choose alternative lending models. We can help you strategize your lending process digitalization.

Accelerating Fintech Change Through Digital Transformation

Posted on 27/07/202009/06/2021 by Anteelo Master

Fintechs are taking advantage of digital transformation by bringing a start-up mentality to corporates to drive growth in businesses.

Coronavirus was a random economic test that no one could have fully anticipated and as social distancing, lockdowns across the globe and work from home rules became common around the world; companies that had seen the writings on the wall became accustomed to the digital age and were the first winners. In this article, we will be discussing in detail how digital transformation in financial services is accelerating the change in Fintech.

Startups and small and medium enterprises (SMEs) have had to reorganize their digital transformation strategies and look to the lending regulatory agencies for quick funding to restart and adapt to the digital ecosystem.

Fintech is not just limited to startups; it also forces large, well-funded enterprises to continue to compete and innovate if they want to stay afloat. Fintechs creates new ways for customers to access and deliver financial services, with simple ways to make payments on investments with quarterly advice and create a personalized budget with the help of the app. To bring difference using digital transformation, a plan with a strategic approach is required.

Professor Anne-Laure Mention, Director of the Global Business Innovation Enabling Capability Platform at RMIT University, Melbourne, Australia, in her 2019 paper- “The Future of Fintech” highlights the ways Fintechs are disrupting the industry with their faster, cheaper, and attractive service models that are inviting interest from the regulators.

Rapid Growth in Fintech Brought By Digital Transformation

While we know that the financial services industry has a traditional perspective and takes time to adapt to innovation, the pandemic has created a different picture. It has accelerated tangible change by adopting rapid physical and digital transformation, which requires the fintech industry to meet the challenge of equipping businesses with powerful computing systems.

Changes can also be attributed mainly to the rapid change in consumer behaviour and new emerging patterns set by the clear will of cash-less and contact-less activities.

Some stats below describe the rapid adoption of digital transformation.

According to a survey by ZDNet, 70% of companies either have a digital transformation strategy in place or are working on one.
Another report by PTC and CorporateLeaders states that 60% of companies which have undergone a digital transformation have created new business models.
The IDG’s Digital business research includes the top industries for digital-first business strategies with services (95%), financial services (93%) and healthcare (92%) being at the top.

How is Fintech Digital Transformation Making SMEs Efficient?

Greater lending flexibility

In the current system, traditional lending models make themselves ineffective because they are not designed to measure and therefore, seem to impose a barrier on SMEs to earn money. Legacy systems are more expensive compared to fintech companies, which boast a reduced performance model designed to reduce costs. There is also a lack of flexibility in this system.

This is where a cloud-based lending approach can make a difference. Creating an application programming interface (API) that will integrate seamlessly with asset systems and provide an awesome and sustainable digital model that can drive a well-designed lending solution.

Channelling digital fintech offerings

With the increasing pace of digital platform acquisition during the pandemic, digital payment platforms and digital wallets and credit cards have seen a rise in demand in SMEs’ transactions. Additionally, SMEs and startups from across the globe have started taking advantage of the digital profits and loans available through simple, fast and secure fintech solutions backed by robust infrastructure processes. By informing high-end consumers and warm-hearted SMEs they have come up with the idea of using fintech solutions to drive their financial operations.

Processing data for operational efficiency

With innovative digital lending platforms, such as knowing your customer (KYC) and personal identity or KYC based on social security, financial consultants can easily access customer data and get their approval, thus ensuring better efficiency. Data Analytics can be used to improve the understanding of customer portfolios to enable better credit processing. Another useful area where data can be used to detect fraudulent detection, where customer behaviour is recorded and used to analyze potential fraud.

Digital Transformation Trends in Financial Services

Among all industries affected by the pandemic and changed by the digital transformation wave, the finance sector experienced one of the most drastic changes in its transformation. Fintech being one of the industries completely dependent on manual work and person-to-person contact, the road to digital transformation and fintech has been a new journey in this sector. The evolution of digital transformation in finance industry has become a business imperative to improve customer experience through development of new products and services.

According to Binder Dijker Otte (BDO), 97% of financial services firms are putting their resources into digital transformation after reshaping their business models to stay competitive in an evolving sector.

Growing enterprise agility

After the numerous experiences gained from the previous financial crisis, an organization’s ability to expand its agility has become a vital trend in the industry. However, to support the type of constant advancement and improvement that shapes the foundation of agility, financial organizations need quick, reliable access to growing amounts of information without making tedious manual work processes.

Increasing mobile banking

The worldwide pandemic has seen customers rushing to mobile services for their financial requirements and bringing digital transformation in banking industry. While mobile banking is not a new concept, but as the first lockdown was imposed, according to Fidelity National Information Services (FIS), that works with the world’s largest banks, said that there was a 200% rise in new mobile banking registrations in April 2020; while mobile banking traffic rose 85% increasing the need for digital transformation in banking.

The universal utilization of smartphones in our day to day lives has increasingly shifted our choice to digital banking for everyday banking services like electronic bill payments, shared payments and instant transfers.

Increased collaboration

As entrepreneurs and business leaders across different industries embrace the team structure as an operational model and acknowledge the democratization of information, there is nowhere required to work together as solidly as in the financial sector. Since, financial enterprises need to adhere to administrative guidelines that implement a siloed way to select business units. But for other business units, the ability to effectively communicate and work can mean the difference between getting to the end goal first.

Risk assessment

The collection, storage and analysis of big data is extremely important to financial services and digital transformation consulting firms. For instance, the quick and perfect finish of a due diligence process before a huge merger and acquisition can make great differences for the financial investors, organizations and employees influenced by it.

Mobile pay utilities

A decade ago there was a time, when mobile wallets were a totally new concept to the people. As times are changing, thus, so are the methods of putting away riches and making payments. Mobile wallets have become the rule of the payment, be it merchants, shopping malls, and other sellers like to utilize mobile payments versus traditional cash and checks. All thanks to the comfort, security, and ease of availability have provided a route to digital development in finance sector over the years, which keep on developing as the time goes on.

Challenges Faced In Fintech Digital Transformation

The first challenge they face is how to present investors and other stakeholders with a clear view of their proposal, especially if their offer is not in a certain way in the existing markets, and is not allowed by a certain number of customers. These difficulties present challenges in raising funds for commercial investors. These participants will want to see clear evidence that fintech digital transformation is innovative, capable of measuring and mitigating its risks as much as possible.

Fintechs faces a major hurdle in building relationships and trust within clients working with traditional financial services providers. Fintechs needs to fight the myth that their new invention calls for security and data management.

Fintechs needs a very supportive control framework that aligns boundaries, to be able to scale globally with minimal collisions.

The fourth digital transformation challenge comes in the form of international action; 95% of Fintech firms failed when trying to scale up. The reasons for this is that Fintechs are failing to operate beyond regional and national regulatory limits, and are failing to reach customers at critical times.’

Conclusion

Financial innovation presents an important opportunity that exceeds its impact on financial services firms; the whole economy can benefit. It embraces changes in the supply of banks, insurance companies, investment funds and other digital strategy financial services firms, as well as the transformation of internal structures and processes, management systems, new ways of communicating with clients and distribution channels. emerged as the cornerstone of new financial institutions.

Digital strategy consulting firms and Fintech provides new ways for customers to access and deliver financial services, with simple ways to make payments on investments with quarterly advice and create a personalized budget with the help of the app. Fintechs brings corporate thinking to the forefront while also increasing competition, customer focus, and collaboration. These fashions bring clear benefits to consumers in the form of competitive pricing, as well as new and easier services to manage their finances.

After getting to know the growth of fintech through digital transformation, now it is time to select the appropriate digital transformation companies to reach your goals. For any information or query you can contact us at Anteelo– a known digital transformation consulting services company.

Finance App Ideas For Startups to Consider in 2021

Posted on 06/06/202007/06/2021 by Anteelo Master

Okay, let’s admit. The adoption of technology in the banking and finance industry has changed the landscape by 180 degrees. Fintech, aka the amalgamation of finance and technology, has not solely added convenience to the ecosystem, but has also made it more secure, quick, and profitable. It has offered a new set of opportunities, cater to the needs of the unprivileged audience, and even bring a significant effect on other businesses.

With all such benefits and opportunities, the global fintech market is predicted to grow exponentially and be of worth $ 309.98 Bn by 2022.

This has not just given an indication that the financial global economy is heading towards fintech, but has also attracted various Entrepreneurs and traditional investors to become a part of this space.

[Since we have made a statement here that the global finance economy is heading towards fintech and not TechFin, you can check our blog on Fintech vs TechFin to find the justification of the same.]

Assuming that you are also an Entrepreneur who also wants to be a part of this mushrooming market, but are clueless about what fintech business ideas will rule the space, here we will be discussing 12 different opportunities.

So, sit on a comfortable couch and start scrolling down.

12 Profitable Fintech Development Fields For Starting A Business

1. Digital Banking

The foremost and most important fintech app idea you can invest in is digital banking.

In the past few years, a dramatic shift has been found in the way people interact with their banks and relish banking services. Users no longer appreciate the need to visit their local banks or ATMs for money transfer and other purposes. They rather are enjoying different advantages of digital banking like the ease of making transactions, investing, opening accounts and deposits, blocking cards, adding beneficiaries, and much more with a few taps on their devices.

With these facilities, the concept of investing in digital banking app ideas have grown a huge momentum in the market. The sector was catering only 9% of the online audience in 2011. But, in just 6 years, it became a part of 69% of the online audience. And what’s more interesting is that it is just the beginning! Various factors like Coronavirus are acting as a catalyst for the market growth.

2. P2P Payment solutions

Seeing the rise in the peer-to-peer payment market, looking ahead to how to develop a P2P payment application is also a nice idea.

The P2P payment apps like Venmo, Google Pay, Zelle, and PayPal are providing consumers with an unmatchable facility to transfer money between bank holders instantly – even when registered with different banks and payment systems. They are cutting down the need for any third-party intermediaries or pay any commission fee for performing any transaction.

Also, these fintech mobility solutions are using the latest technologies like NFC and face and voice biometric technology to streamline the POS processing, enhance risk management, and deliver an optimal customer experience.

3. Personal finance management app

Personal finance management application is again one of the best financial app ideas to consider for diving into this market effortlessly.

With consumers getting more conscious about their earnings and savings, these applications are gaining traction in the market;making both investors and startups look ahead to developing a personal finance app.

These applications are acting as a weapon by which app users can categorize their expenses and incomes, and track them in real-time to get a better understanding of how to manage their finance smartly and effectively. These apps, built on the rulebook of how to develop effective personal finance apps, are also offering them an ease to connect all bank and credit card accounts to automatically get the data updated, along with payment reminders. And the best part, the data is displayed in a visually appealing format, which adds to their convenience.

4. Robo advising software

Robo-advising, which is one of the proven ways fintech is attracting millennials, is also a great area for making an investment in the financial application development economy.

These machine-learning driven software are serving users with the finest of personalized and future-centric financial advice at lower costs. They are also analyzing their expenditures and investments to aid them in increasing their after-tax returns. In addition to this, they are adding convenience to the process with minimal-to-no human intervention.

What’s more interesting is that as per a Business Insider Intelligence report, they will be managing about $1 trillion of funds this year and nearly $4.6 trillion by 2022. Something that’s a clear indication that one must pick this among the ample of fintech startup ideas to rule the market in 2020 and beyond.

5. Loan Lending app

Creating a finance app for P2P lending is also one of the trending app ideas that are getting popular in the fintech market.

A loan lending app (also called P2P lending app) acts as a marketplace where lenders and borrowers can connect and cater to each others’ needs without using the product discovery services of any financial institution. On one side, these applications enable borrowers to set the maximum loan rates they can manage. While, on the other side, they let lenders bargain with each other to offer funds at the lowest rate. And this way, get more customers or borrowers.

6. RegTech App

RegTech applications also come into the category of best mobile app ideas for fintech startups.

These mobility solutions help financial companies comply with all the local and global standards. They enable organizations in automating a major fraction of their processes, including customer identity verification, reports compilation and submissions, transaction monitoring and reporting, etc., and increasing the customer retention rates.

A ripple effect of which is that Regtech apps have landed among the top fintech trends for 2020 and are expected to make a market of $53Bn by the end of this year.

7. Investment and trading app

Putting efforts into the process of app development for investment and trading is yet another decision that can make you enjoy limelight in the marketplace.

Users, these days, are showering love on platforms that let them get a comprehensive knowledge of shares, stocks, forex, and funds, and invest in them efficiently. They are paying more attention to applications that gather investment data from different sources and empower them to calculate the asset valuation and make the right decision.

Considering this, if you are eager to invest in stock trading app development, it is advisable that you firstly get a clear idea of the budget requirements. This is so because shortage of money can halt your project, compel you to remove the must-have fintech app development features, delay your app launch plan, and much more.

8. Digital wallets

Since digital wallets are giving users an escape from carrying physical wallets or credit/debit cards, their market is also rising significantly. These applications are offering users the ability to make payment in a few taps or using biometrics, while getting lucrative coupons and offers in return.

It has been forecasted that the digital wallet market will be worth $7,581.91 Bn by the year 2024. Something that is enough to let you know why to pick this among various innovative app ideas for entrepreneurs to step into the financial market.

9. Blockchain applications

Seeing the growing impact of blockchain in fintech , embracing this technology for starting a business is also an undeniably profitable idea.

Currently, various fintech startups and establishments like We.trade, Circle, LAToken, Veem, and PayStand are relying upon this technology to offer a myriad of options to their targeted user base. This includes:

Performing transactions using cryptocurrencies,
Paying for transportation only once they receive an information that the cargo has reached to the port,
Acting as a decentralized autonomous organization (DAO), where members work as per the programmatically defined rules that tells who their members can be, what business or activity is allowed, and how tokens or funds can be exchanged.

10. Crowdfunding solutions

Crowdfunding is also emerging as one of the most successful fintech startups ideas to go with.

These digital solutions are proving to be one of the best alternate funding models for Entrepreneurs. They are helping them with raising funds for their new or existing enterprises via collective efforts from different individual contributors and venture capitalists.

Currently, there are a limited number of crowdfunding platforms such as Indiegogo and Kickstarter and the concept itself is popular across the US and UK regions only. However, it has been found that these digital solutions are getting traction in the market, and are predicted to have a market of USD 28.8 Bn by the year 2025.

11. Insurtech solution

As you might be familiar with, insurance has always been a co-running business with banking in the finance sector. They have operated in synchronization with each other in various cases. And now, when finance has turned into ‘fintech’, insurance has also come up with its upgraded solution version – Insurtech.

This subdomain, with the incorporation of latest technologies like AI, IoT, Blockchain, Open API, and Machine learning, is enabling insurance companies in delivering impeccable customer experience by analyzing a heap of user data, checking the market trends, understanding user emotions and needs, offering customized yet quick policy comparison options, managing risks, and much more. And that too, without relying upon any third party insurance broker.

Because of this the global insurtech market, which was valued USD 1.5 Bn in 2018, is anticipated to flourish with a CAGR of 43.0% between 2019-2025. Also, many insurtech firms are gaining significant fundings – a real example of which is that WeFox raised $110M in Series B extension funding round.

It is safe to assume that to bring all the technologies and innovations together, the insurance sector will start deep-diving into insurtech mobile app development guides hand-holding them towards digitalization.

12. Crypto exchange platform

Last but not least, developing a crypto exchange platform like Coinbase is also one of the best finance startup ideas to work on.

These platforms are giving users an opportunity to step into the decentralized market by trading crypto currencies for other assets like fiat money or other digital currencies. In other words, they are letting users exchange one crypto currency for another, get crypto tokens in return of fiat money, and even buy/sell their crypto coins. All while enjoying perks like transparency, lower fees, higher security, and faster processing.

Now as you know the types of finance app ideas you can work on, it is quite obvious that you would be eager to learn where to start with. Considering the same, here we have picked up some crucial steps that you must follow to be a part of the future of the fintech industry.

Things To Consider While Launching Your Fintech Startup

1. Define your niche market

As hinted earlier, fintech is a big sphere to explore. Striving to rule the complete finance world at once can be tricky and nearly impossible. So, it is advisable to pick a particular niche among the different subcategories of the market, which are as follows:

Payment and international money transfer,
Mobile banking,
Personal finance management,
Insuretech,
Trading and lending,
Crowdfunding, and
Data analysis and financial decision making.

Once the niche market is decided, do market research to determine the specific audience your product/service will target, i.e, based on age, gender, occupation, and country. This will help you to launch your fintech startup locally first and then, enter the global market with better success ratios.

2. Learn about compliances

When it comes to the banking and fintech industry, they are highly regulated. So, it is must for one to be familiar with all the specifications and characteristics of this highly complex sphere, which includes legal regulations, limitations, laws, and requirements.

3. Find your startup USP

Due to the increasing set of opportunities and profits, the fintech market is becoming competitive day by day. In such a scenario, it has become even more important for anyone coming up with a new finance app development idea to be sure that his idea beats the existing ones. Aka, the idea they formulate is not something generic; it offers a functionality that is better than ever existed before. Something that could become their brand’s USP.

Now, while doing customer surveys and going through different reports would help, it is a profitable decision to invest your effort in competitive analysis. This approach will help you with finding the common success factor among all the top players, their business and revenue model, the pain points they fail to see, and thus, refine your idea.

4. Raise fundings

While you might have some savings with you, there are various fundraising ways like bootstrapping, crowdfunding, venture capital, and angel investment that are prevalent in the market. So, look forward to these methods for raising enough money to make your fintech app idea financially-backed.

5. Hire the right fintech developers

Believe it or not, even the finest idea can’t survive the market without the right team of financial app developers. So, do not keep your app idea confined to you and look around giving it a shape on your own. Rather, look ahead to hiring a reputed fintech software development company.

A team of professionals who have an expertise in app development and have prior experience in your niche subdomain can help you with choosing the right technology stack, revamping your business strategies, coping up with the hidden barriers, and scaling up your fintech app idea. And that without making a hole in your pocket

6. Get familiar with business and technical challenges

Like that in the case of any other startup, there are various challenges associated with establishing a fintech business, especially those associated with the transformative nature of digital technologies. For instance:

Cybersecurity
Integration of AI and Blockchain
Big data usage

So, it is advisable to gather comprehensive information about these challenges as well as connect with the financial app development companies that aid in mitigating them efficiently and effectively.

7. Launch an MVP

Last but not least, do not feel tempted to develop a full-fledged fintech mobile application. Rather, look ahead to testing water with a Minimal Viable Product (MVP) first.

An MVP not only gives you the privilege to enter the market at a cheaper and faster rate, but also helps to raise fundings.

The Fintech market is mushrooming at a staggering rate. Various fintech app business ideas are entering the market. However, not all startups are enjoying the same set of opportunities and benefits of developing financial apps. The pressure to deliver the finest combination of expertise, creativity, trust, and technology is making their journey tougher than expected.

However, by following the aforementioned steps, you can cut down hassles in your path and get into the list of top fintech startups in no time. So, keep implementing them.