Fintech & Software Development Trends
Fintech is about technological growth in the world of finance. This ranges from credit cards to cryptocurrency exchange or stock trading apps. Users can get instant credit in a matter of minutes now. With extended lockdowns, Covid 19 restrictions, remote work, everyone is shifting towards online financial activity. This has boosted software development in Fintech software. So, how fintech is changing the world, and what are some fintech tools? Let’s look closer at some of the top fintech trends that are going to be hot next year.
Top Fintech Trends
Mobile banking is on the rise after the pandemic and is growing rapidly. The question that needs to be asked, is mobile banking a fintech? Cashless transactions have been encouraged starting from 2019. Previously users who were not used to doing financial transactions are getting more familiar with mobile banking apps. Mobile banking software providers allow users to make transfers from one account to another by simply clicking a few buttons. Bank account statements, bill payments, online shopping are simplified due to mobile banking.
Digital wallets are considered more secure than traditional card payments due to the enhanced security that a phone app provides. A Digital wallet or a mobile app allows users to pay at the cash register with just their phone. Digital wallets also store driver’s licenses, transportation passes, gift cards, tickets. Digital wallets make shopping more convenient, bringing technological advancements in the fintech world. Some of the most used digital wallets are Android Pay, Apple Pay.
Big Data, Machine Learning, and AI
Machine Learning in fintech and AI are actively used across many industries to identify trends, and fintech is not an exception. ML & AI lets users monitor their financial activity and possibilities using various data, such as investments and credit history. Banks are using ML & Artificial Intelligence in fintech to identify if a person is qualified for a loan analyzing hundreds of factors, even social media accounts.
Some examples of how AI in fintech & ML are implemented in the fintech world: data collection & analysis are applied as operational improvements and optimizations, in order to forecast customer needs, and promote fintech products that might be interesting to them.
Alternative credit decision-making models (ACD) apply ML to reduce the risk of loan failures. Intelligent chatbots & smart systems are used for interaction with a customer.
Security. Machine Learning helps analyze user behavior and detect abnormal patterns in user activity or transactions, in order to prevent financial fraud or security breaches.
Smart risk management. Applies predictive algorithms and reacts to changes proactively.
With the acceptance of blockchain technology financial institutions are planning to facilitate and renovate their operations. When cryptocurrency is adopted at a broader level this will lead towards redesigned economic infrastructures and growth in contactless transactions. Financial organizations and the banking sector are expected to display a boost in blockchain adoption in the next few years.
Blockchain in fintech provides transparency and added security that greatly facilitates accounting and auditing. All the transaction information is stored and available to the public, eliminating ting modification or falsification of the previous transactions. This makes blockchain an ideal audit tool. Today many companies are accepting cryptocurrency as payment options (Ethereum, Bitcoin, Dogecoing).
Technological advancements and the active use of smartphones resulted in a growing number of in-app purchases. E-commerce and subscription-based services are increasingly using in-app purchases. Market share for in-app services is estimated to reach $340 billion by the year 2027. Completing transactions for a product or service from gaming to fitness, using an app on the mobile device lets users easily perform financial transactions.
Fintech security methods guarantee safe and secure transactions across the board. Clearly, in-app purchases are growing to be a common financial practice accepted by businesses of all sizes.
When it comes to security, biometric authentication provides the best security measure there is on the financial market. Since Apple included fingerprint authentication in 2013 allowing users to authorize transactions in banking apps and online stores. All modern smartphones have a fingerprint reader that allows software developers to integrate biometrics in fintech authorizations through API.
Another use of biometric data is retina and iris patterns, voice and facial authentication, and even DNA biometrics. Contactless biometric authorization becomes increasingly widespread during the pandemic, as it excludes any contact with device surfaces.
What is the relation between fintech software development and software technologies?
Security & UX/UI
Security is the number one concern in the software development world. As financial fraud and cybercrime are growing, companies need to guarantee their customers secure and safe data storage. When it comes to fintech security, it needs to be proactive and predictive in identifying unusual behavior and eliminating any fraud possibility. That’s where fintech relies closely on ML and AI.
As Fintech is a fast-growing industry, flexibility and agility are required not only on an individual level but also from the whole IT team departments. With cutting-edge technologies, regulatory measures, IT teams should be ready to adapt to changes quickly, keeping the customer in mind.
A large and expanding number of users are using banking and financial apps on their mobile devices, smooth running user and customer experience are becoming highly important. Highly skilled UI/UX specialists help create fintech solutions that are applied in B2C and B2B business operations. Previously banking apps were inconvenient, rigid, and user-unfriendly, but thanks to cutting-edge technology solutions they have become transparent and easier to use.
Changes in the fintech industry and new financial challenges have forced the fintech industry to undergo considerable transformations. New technologies such as blockchain-based solutions, financial software development companies, ML & AI, mobile apps help make transactions safer and more secure and interact with clients more effectively. Companies that strive to be on the top of the market need to seek new opportunities to ensure fintech digital experience runs as smoothly, securely, and profitable as possible.
Historically, breakthrough accomplishments have been moved forward by technology and innovation. Crisis accelerates technology adoption and innovation. With deep knowledge of fintech technology trends and software solutions, at Edsson we implement technologies to enhance financial services. We are happy to become a reliable, strategic partner.