While many people think of FinTech as just an app on your phone, the reality is that it is more than just payments. In fact, it is a revolution in how our financial system works touching everything from the cash registers at your local supermarket to even the future of money.
Even though it feels like the revolution just started, the reality is that technology and the financial service have gone hand in hand for nearly 70 years. Just think of everything from check readers to credit card processing machines.
However, things have started to speed up in the last few years and here are the top three FinTech trends to watch in 2020. This includes everything from automation such as job scheduling software to the possible end of cash.
1. Automated Processes
While the terminator might not come strolling into your local bank branch, the reality is that most banks and insurance companies are automating as many processes as they can find. As Andrew Yang pointed out this might not be good for long-term employment prospects in finance, but it is certainly good for the bottom line at these companies.
Granted, automation is nothing new, but what is gaining steam is something called Robotic Process Automation (RPA). This technology allows developers to organize automated processes to work seamlessly with their human counterparts.
What this means for banks and insurance companies is that they can seamlessly integrate their automated processes with those which are still done by humans. The result is reduced processed times and increased efficiency.
But what is truly exciting – at least from a technology point of view – is how these bots are increasingly able to take on more of the work that was traditionally done by humans. This includes completing forms, filing digital documents, and supporting data queries for compliance departments.
2. Crypto is the New King
For those who have been following Bitcoin and other cryptocurrencies, they know that it is not only a small part of the global monetary system, but it is also extremely volatile. However, this is set to change next year as companies like Facebook and even some governments release their own cryptocurrencies.
While Facebook’s Libra will initially be used as a payment option on the company’s platforms, company representatives have noted that their goal is to have it become a “stablecoin” supported by a reserve of physical assets.
A big part of the challenge will be reducing the cost and process time needed to transmit a cryptocurrency as this is seen by many as an impediment in the broader acceptance of this new payment platform.
While in the case of Facebook is the question as to whether users will trust the company with its money after several high-profile revelations about the company’s sloppy handling of users’ personal information.
Even without Facebook taking the lead, there is strong evidence to support the growing acceptance of cryptocurrencies. So, if cash was king, then cryptocurrencies may be the new king.
3. Meet Your AI Banker
There is no doubting that the technologies which underpin Artificial Intelligence (AI) are rapidly developing. Granted we might not be at the point at which machines become conscious – assuming they’d let us know – the combination of more powerful tools and refined decision trees are making AI-powered customer support a reality.
This can be seen in what is called “conversational banking” which is when a customer interacts with a chatbot to solve a banking issue. According to research by Accenture, nearly 64 percent of consumers would rather type a simple message than call a support number – this is a trend which is expected to only grow going forward.
As such, chatbots which can learn from previous interactions with customers are set to provide an eerily human-like experience by providing fast, courteous, and correct support to customers when they need it. Compare this to calling 800 numbers and dealing with voice-operated menus and it is no surprise that AI-power bankers are tipped to rule the world.
Technology and finance have gone hand-in-hand for years as everything from ticker tape machines to wire transfers had its start in the tech lab of a company or a startup. What has changed in recent years is the pace of innovation as technology has begun to transform the customer experience in financial services.
Front and center in this revolution is FinTech and of the most exciting trends to watch in 2020, are automated processes through RPA, the continued rise of cryptocurrencies, and last, but not least, AI.