As per fintech entrepreneur Michael Zetser, a well-known fintech guru, this year has some intriguing trends in store for the world of financial technology. Even though half of the year has already whizzed by, he anticipates that there’s still a lot to unfold. Fintech software has been on an impressive growth spree lately, with projections indicating that the industry will skyrocket close to $200 billion in value by the upcoming year. Let’s delve into the most prominent fintech trends that are poised to gather even more momentum.
The Rise of Digital-Exclusive Banks
With the growing popularity of payment apps and non-bank financial institutions, the notion of digital-only banks is becoming a reality. Why go through the trouble of visiting a brick-and-mortar bank when you can seamlessly handle all your banking needs from the comfort of your home? These digital banks eliminate the inconvenience of physical visits and deliver services right to your doorstep.
Moreover, they do away with the need to endure long queues and adhere to specific business hours. When you opt for digital-exclusive banks, the entire process takes place online, ensuring lightning-fast transactions and enhanced accessibility. And let’s not forget the cherry on top: a superb digital banking experience no matter where you are and what time it is.Â
Looking Beyond Digital Banking
Beyond delivering an exceptional banking experience, what else can digital banks bring to the table? Well, Michael Zetser sheds light on the fact that these banks can minimize fees and offer more attractive interest rates, thanks to advanced cost-saving strategies. Yet, implementing such a solution is far from a walk in the park. To seamlessly introduce digital-exclusive banking, companies must establish a robust digital infrastructure. Moreover, they should provide a user-friendly application that doesn’t necessitate users to embark on an extensive learning journey just to navigate the app effectively.
And let’s not underestimate the significance of widespread internet access. While such banks can thrive in developed nations, it will be quite some time before they become feasible options in countries that are still in the developmental stage.
Finance Integration’s Implementation in Non-Financial Apps
One more intriguing trend highlighted by Michael Zetser is the increasing prevalence of embedded finance. This concept involves incorporating financial services and functionalities, such as payments, directly into non-financial platforms. This development promises to usher in a fresh era of convenience, allowing users of traditional apps to make transactions seamlessly within the same application.
With embedded finance, users no longer need to endure the inconvenience of switching between multiple apps just to complete a single transaction. Consider, for instance, shopping apps that permit you to add items to your cart while browsing. In the past, when it came time to make a payment, you would have to switch to a different app to finalize the transaction. Thanks to this innovative feature, users can now execute transactions within the same app they used, streamlining the entire process.
The Emergence of Regulatory Technology in Fintech
In the world of fintech, discussions frequently revolve around security concerns. Recognizing this, fintech expert Michael Zetser acknowledges the ever increasing need for robust solutions to address these concerns. Given the sensitivity of the matter, regulatory authorities are poised to play a pivotal role in overseeing fintech applications and platforms to mitigate the risks associated with financial crimes.
However, considering the vast scale of fintech platforms, regulating each one individually can prove to be an arduous task. Hence, regulatory bodies are increasingly turning to their own technology solutions to streamline and automate the process of ensuring regulatory compliance. Examples of this approach include the utilization of RegTech, which facilitates activities such as conducting Know Your Customer or Anti-Money Laundering checks to evaluate whether a platform adheres to these essential requirements.
In this context, regulatory technology serves as a valuable companion technology that aids fintech applications in effectively handling compliance obligations with greater ease. The versatility of this technology extends beyond this role, encompassing the enhancement of risk reporting, the detection of fraudulent activities, and the bolstering of risk management strategies. What sets it apart is its integration of artificial intelligence, which ultimately automates the security measures provided to people in the fintech sphere.
Exploring the Emergence of Peer-to-Peer Lending
In the ever-evolving world of financial technology, one trend that’s making waves is peer-to-peer lending. This concept is gaining substantial popularity, and recent research points to the alternative finance sector boasting a staggering $10.82 billion valuation. However, according to the insights shared by Michael Zetser, this trend is stirring up quite a buzz, thanks to its transformative impact on the borrowing and lending landscape.
This trend distinguishes itself by removing intermediaries like banks and streamlining borrower-lender connections through third-party apps. Peer-to-peer lending eliminates tedious approval processes and excessive paperwork. Michael Zetser, an avid fintech enthusiast, highlights that it provides borrowers with diverse options and competitive rates while offering lenders the chance to earn from their investments. This transformation simplifies and benefits everyone involved in the lending process, reshaping the financial landscape.
