FinTech in 2019: Top 10 Trends You Should Follow to Succeed
If you think that FinTech means using computers in banks, we have a surprise for you. Whenever you’re making financial transactions on your computer, shopping online or saying “PayPass” to the cashier, you’re using the benefits of FinTech. Basically, every cooperation of technologies and financial services is a representation of FinTech.
Financial institutions have two ways of applying FinTech solutions to keep up with the competition. They can either choose to partner with FinTech companies or develop their own solutions. Either way, they have to follow the tendencies set by the FinTech industry and the global digitalization. Let’s have a look at this year’s major trends in FinTech to figure out which way to go with your digital financial solutions.
Top FinTech Trends of 2019
In 2018, contactless payments, biometric technologies and AI were among the major FinTech trends. But what will be driving the FinTech domain this year? At Skelia, we’ve come up with a list of the top ten FinTech trends for 2019. They are:
- Blockchain adoption
- Mobile payments
- Artificial intelligence
- Voice technology
- Regulation Technology (RegTech)
- Robotic Process Automation (PRA)
- Internet of Things
- Payment Services Directive 2.0 (PSD2)
- Initial Public Offerings (IPOs)
True, there has been much ado about blockchain, but FinTech is exactly the industry that was influenced by the hyped technology. PwC claims that 77% of FinTechs will adopt blockchain by 2020. Of course, it’s security that makes the adoption so extensive. The blockchain records transactions and updates the digital ledger online without anyone having complete access to the data stored.
Truth be told, 2018 has been a difficult year for blockchain. According to Forbes, bitcoin price plummeted from $19,000 to less than $4,000, throwing shade at other applications of the blockchain. But experts don’t give up, still considering its acceptance by many companies to be assertive in 2019.
Mobile banking is going up in 2019. According to eMarketer, 36% of smartphone users (938,2 million people) will be using payment apps in 2019, that’s 13,5% of an annual increase. It is estimated that 61,6 million people in the US alone will be making mobile payments year-over-year. NFC devices and QR scanners in many points of sales (POS) make mobile transactions so much more convenient.
Artificial Intelligence (AI)
Artificial intelligence will rock individual financial planning, fraud detection (anti-money laundering) and process automation, the PwC report on the value of AI says. Plus, in 2019, adopting AI can be valuable for maintaining the supply chain, managing the risks of cyber attacks and making the financial sector work more effectively by eliminating human intervention.
NLP (Natural Language Processing), a branch of AI, can help the digital banking customer support by processing a large number of queries. A report by Gartner claims that by 2020, virtual customer assistants (VCA) and/or chatbots will take over 25% of customer assistance and maintenance services. Something to think about if you’re looking to employ a chatbot.
The Voice Technology
Luckily for the fans of Google Assistant, Siri and Alexa, modern banks try to implement AI-driven voice technologies to improve the customer experience of call centers and make secure banking transactions. In 2019, voice recognition in banking will become a reliable authentication method for your bank account. On top of that, voice technologies will let you make mortgage payments, review your recurring balances and transfer money.
Regulation Technology (RegTech)
FinTech is an industry that needs to respect regulatory compliance, and here’s where the Regulatory Technology or simply RegTech swoops in. It can help financial businesses cover both compliance and model risk management. Crowd Learning Hub predicts that RegTech investments will grow 500% by 2020. That’s an increase from $10,6 billion in 2017 to more than $53 billion three years later.
ESMA, the European Securities and Markets Authority, states RegTech will be particularly affordable with the rise of AI/ML tools in a speech on the development of RegTech and SupTech. Machine Learning (ML) algorithms can help banks and backers comply with regulations by examining the new ones and reporting them. This will be a great way to bypass the penalties forced by the GDPR (General Data Protection Regulation).
Robotic Process Automation (PRA)
Robotic Process Automation software or PRA, is here to automate human labor and eradicate human error. Crowd Learning Hub claims that 75% of financial services corporations will be using RPA software by the end of 2019.
One great thing about PRA is that it helps non-tech-savvy people follow workflows easily, and even non-developers will be in charge of building up the necessary processes. That’s why in 2019, we’ll probably see advancements in the technologies that use bots, automation of employee duties and workflow construction.
Internet of Things (IoT)
PwC predicts that by 2020, more than 50 billion devices (“things”) will be connected, and forecasts that the IoT revenue will exceed $3 trillion in 2020. By integrating IoT into FinTech, banks and other financial institutions can enhance data protection and customer service, while wearables can become a powerful branding tool. Certain wearable devices can also facilitate digital payments.
The Cloud-Based Approach
Accenture’s report “Cloud and Clear” claims that modern banks need to reorganize their software systems using cloud platforms to both manage security and comply with regulations. And though cloud computing is old news, Accenture found out that 43% of surveyed banks don’t have a cloud strategy or use a very basic one. They must be unaware that using cloud-based solutions or porting your existing ones to cloud platforms makes the organization more flexible and efficient. So, in 2019, FinTech providers should focus on the cloud-based approach in developing solutions (if they haven’t been doing that already).
Payment Services Directive 2.0 (PSD2)
The PSD2 is the legislation made to create a single market for payments in the EU as well as bring more protection to customer data. 2018 was the year both the GDPR and the PSD2 took effect almost simultaneously. And 2019 will be the most important year in terms of sticking to PSD2. September 14 is the ultimate deadline for all EU corporations to comply with PSD2’s Regulatory Technical Standard (RTS) pertaining to directive (EU) 2015/2366 (PSD2).
Initial Public Offerings (IPOs)
Regardless of their bad reputation, Initial Public Offerings (IPOs) will take a new breath in 2019. Robinhood, Credit Carma and Coinbase are among the best-known companies eager to keep path with IPOs in 2019. Also, the Mergers and Acquisitions (M&A) deals are becoming more widespread as financial companies cooperate with third parties. Together, they aim to deliver a better experience for end users by integrating data analytics, blockchain and mobile wallets into the existing solutions.
In 2019, the FinTech domain will focus on implementing AI, digital voice technologies and cloud-based solutions. Cybersecurity compliance regulations and the velocity of transactions will remain the commanding factors in the industry. Mobile payments should stop being a luxury and become a regular thing every bank client can use. And don’t forget that in 2019, all European financial institutions will have to comply with PSD2.
It’s time for finance to shed the stereotype on an industry that doesn’t like becoming digital. You either get along with the digitalization or lose your clients. Once you decide to build a FinTech solution, don’t forget to address the FinTech trends of 2019. Or contact Skelia. We’ll be happy to help you build a FinTech solution anytime.