Flavia Alzetta, CEO Contis gives us the highlights of top fintech trends to watch in 2019 that will contribute to savings and liquidity in the market.
It looks like 2019 could be another ground-breaking year in fintech. Open Banking will, of course, be grabbing most of the headlines, as deadlines for banks to get up to speed come and go. But the change won’t stop there. The fintech industry constantly evolves, regardless of legislation – and this year will be no different.
We expect a whole host of new innovators to spring up – many will, of course, be grasping first-mover advantage on all the new banking APIs that’ll be made available, while others will be operating independently of these sweeping changes.
Making sense of it all is never easy. To help you out, we’ve outlined the seven top trends that we think will hit the fintech industry in coming months.
Industry-led Blockchain – Most of us are only familiar with the term blockchain in the context of cryptocurrency. However, the technology is useful for plenty of things outside of working out how much your latest investment in ethereum is worth. There is now a whole host of new companies using it to streamline other sectors.
For example, the real-estate industry has long been renowned for its use of third parties as intermediaries for buying and selling. However, blockchain developments in this area are quickly removing the need for a middle man. The new technology could be set to disrupt the industry, and provide new efficiency and transparency.
Corporate on-boarding apps – Banking for businesses has generally been a complex and time-consuming process. However, the latest trend in the industry has seen FinTechs combine with established banks to help them reduce the time it takes to on-board new corporate customers. FinTechs have combined quicker, sleeker technology with a streamlined verification process.
The best of these companies are using Artificial Intelligence combined with new practices in data-sharing, which allow both consumers and businesses to be onboarded far quicker than they would be on high-street bank legacy systems.
Biometric technology – The world of fintech is nothing if not innovative. But as creatives and technologists look to expand the abilities of their software, the new systems bring with them an increased risk of malware, viruses and hackers. However, as the bad actors have become more prevalent, so have the technologies designed to stop them.
Biometrics is an area that has a lot of room to grow. Face and fingerprint recognition is already making secure verification more reliable – but iris scanning and voice recognition might not be far off. The ways they are used could also multiply, as more and more companies come to market with new and better ways of verifying customers accurately. Who knows – one day it could well be possible to make a purchase just by thinking about it. Great news for the doughnut industry…
Micro-Lending – Micro-loans have become a popular method of crowd-funding for businesses that have been declined by high-street banks or lenders. They operate under the same principles of peer-to-peer collaboration that fintech has become famed for, working in collaboration with dedicated specialists in order to enhance SMEs’ chances of success. They can be used for things like filling gaps in finance for larger stock orders by micro-businesses, or plugging cash-flow gaps for smaller businesses looking to ramp up operations.
The mobile revolution has meant FinTechs are at the forefront of micro-loans. Modern micro-lenders generally operate online-only, thereby reducing overheads. Lower start-up costs have also allowed for the replacement of expensive sales agents with carefully crafted advertising through social media, while the application processes can typically be replaced with a user-friendly app.
This in turn, creates more competitive products for a fraction of the original fee. All this means an industry previously burdened with a reputation for high interest rates has reaped the rewards of open banking and progressive technology.”
“The fintech industry constantly evolves, regardless of legislation – and this year will be no different.”
Regulations Advisory apps (RegTech) – Many businesses worldwide have struggled to implement the regulations applied by GDPR. More specifically, banks and financial institutions have struggled to adapt to the increase in availability of customer data and how it is being used by competitors.
The emergence of regulation technology or RegTech, demonstrates how big the opportunity in this area has become, as firms are thriving off supplying the tech businesses need to handle the swathe of new regulatory and compliance laws. Compliance with these regulations has moved business away from those within traditionally larger corporations, to smaller start-ups dedicated to turning over every rock in order to comply and thrive under the new regulations.
Savings tools – For many, saving can be tough. However, new ideas are bringing changes to the process of saving money. For instance, there are apps that allow consumers to regularly contribute to a savings account in order to better their credit score.
It is the same principle that allows people to regularly contribute to a holiday deposit service that uses their savings to automate the process of booking a holiday, and informs them of the details of their holiday in advance, to ensure there are minimal problems with employers. This advancement allows for consumers to build much healthier savings habits.
Connected Cloud Services and Data Lending – For many years, lenders used the FICO scoring system as their rationale for approving loans. However, many now consider this outdated. A FICO score is a type of credit score created by the Fair Isaac Corporation, a data analytics company based in San Francisco. Lenders use borrowers’ FICO scores along with other details to assess risk and determine whether to extend credit.
However, the evolution of companies in the data lending space has meant credit scores are slowly becoming defined by spending patterns and repayment history. Connected Cloud Services could be a huge feature of the landscape in coming months and years.