3 Fintech Trends To Watch in 2020

Forecast of Fintech Trends in 2020

Financial technology, known commonly as fintech is the umbrella term for any technology that is used for improved efficiency and quality in the delivery of financial services.  The market is comprised of start-ups and companies that develop fintech hardware and software in an attempt to compete with and replace more traditional methods by offering a more convenient and accessible service. Naturally, the market for fintech products and innovation has grown exponentially in recent years in accordance with the general increase in use of technology across the world.

This has had a rapid and substantial effect on banking and financial services which have been changing to incorporate latest products to make both internal and external processes easier for users. With the quick pace of advancement, a year is a long time in the fintech environment and 2020 looks to be an interesting year full of exciting developments.

Big Data

The collection and use of information is a speciality of some fintech companies. It’s important for companies incorporating the use of big data to set up a relevant framework to sustain and appropriately utilise it. Increasingly more companies are opting to implement big data to improve their services and the number of job roles and openings in this particular field are expected to increase to the extent that there may be a risk of talent shortages. Data is harvested and processed using analytics with the goal of making systems safer and more personalised.

Customer bases are divided based on demographics such as gender, age and location but also by their spending habits. This helps fintech companies create more personalized financial products. Additionally, since the use of big data means spending habits of individual customers are becoming more understood, financial companies will also be able to detect suspicious activity and fraud quicker.

AI Customer Service

With the massive advancements in fintech occurring within companies and behind the scenes from a customer point of view, it’s important to remember the technology that is going to affect the customer experience. AI is at the forefront of development in customer relations and recently the successful implementation of chat bots has set the foundation for improved and more intelligent AI options. AI technology has been proven to provide a positive and efficient interaction for the customer and improve the recognition of fraud.

For companies, AI has allowed for the optimisation of services; they can reduce spending on human customer service agents as the majority of simple queries can be resolved via AI. More complex matters can then still be referred to a live customer service agent who will have more time and resources to assist. “The use of AI is set to increase and fintech companies are competing to develop more intelligent and competent versions that can handle increasingly complex tasks as well as improve emulation of human interaction” says Rob Sawyer, tech blogger at Britstudent and Writemyx.

Open Finance

Previous years have brought about open banking to allow access of consumer bank accounts via third party applications to make banking easier and more efficient. This is now evolving into open finance which extends the data-sharing aspect of open banking to a wider range of financial products such as saving, pensions, loans and investments. The aim is to make managing finances easier for consumers and get a complete overview of their financial health all on one platform that financial institutions can use to offer personalised finance options.

“Since all of a customers’ financial data can be viewed at once, companies can make appropriate recommendations for particular savings accounts or credit options that are most accurately suited to the individual customer” says Mira Budiman, business writer at  Australia2write and Nextcoursework. Banks are being pushed into making open finance agreements and progress in this area is expected to speed up significantly in 2020.

Conclusion

Fintech has been changing the finance and banking industry for the better. With the introduction of open banking and open finance, bank and customer relations have been more transparent. Banks and financial services are now competing to provide customers the best and most advantageous services which is a reaction to customers having a much stronger sense of their financial health.

The introduction of automated services allows companies to manage huge amounts of data to create optimised and efficient services that are personalised to the individual customer. The innovation of the fintech industry is set to keep growing and the market is likely to expand with more jobs being created and more companies accepting the services.

Michael Dehoyos is a marketing expert who imparts his expertise as a content marketer and editor at Phdkingdom and Academicbrits while contributing writing to numeous sites and publications including Originwritings. Additionally, he offers marketing consultancy to companies in need of strategy.

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