5 Tech Trends That Are Shaking Up The Financial Sector

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The use of fintech or financial technology is becoming increasingly widespread. Chances are that you’re using it, too, even if you don’t realise it.

The developments in this area are a pretty positive thing, designed as they are to make personal financial management easier and improve financial literacy. As fintech experiences its meteoric rise and its applications increasingly become a part of our every day, it’s worth tracking the trends that are pushing this new technology into the mainstream. 

What actually is fintech? 

Before we dive into the trends that are shaping the future of fintech, we should first pin down exactly what it is. And, in basic terms, fintech refers to the latest software developments in the financial services sector. Using technologies such as artificial intelligence, biometrics, payments, crypto and others, banks are increasingly able to offer their customers more convenient, streamlined services. 

And, it really is no exaggeration that fintech is taking off. As a result, 82% of traditional financial organisations plan to increase their collaboration with fintech companies in the next five years for fear of losing out on customers if they don’t. 

Top fintech trends for 2021 1. Meeting consumer demand 

Fintech is, at root, all about the consumer. As such, it is the demands and desires of consumers that guide the industry, not to mention their needs. For example, a lot of customers want the opportunity to manage their money remotely, without having to wait in long queues in their local branch. And many other consumers have poor financial literacy. So, budgeting, financial planning, and money transfer tools have become much more readily available in recent years.   

2. Online banks 

Online banking has been adopted by most major Australian banks, including the country’s big four: CommBank, Westpac, ANZ, and NAB. It is on these online banking platforms that customers can access most fintech services. However, there has also been a trend towards banks that are online-only or, in other words, banks that have no physical branches at all. 

There are a great many benefits to digital-only banks, both for consumers and the institutions themselves. One major advantage is that digital-only banks don’t have to worry about investing in physical locations. This helps to save money, which can instead be invested into offering innovative services to customers at lower rates. 

3. Increasing security 

People are worried about their data, as cybersecurity becomes a more pressing issue for financial services and similar sectors like real estate. To help ease people’s concerns, biometric security systems were introduced. If you do online banking, the chances are that fingerprint verification will be one of the steps you have to take to get into your account. 

However, as the coronavirus crisis catalyses a shift towards contactless services, touch-based biometrics will likely become less and less common. 

4. Voice technology 

Voice-based biometrics is growing in popularity, offering as they do a contactless alternative to the fingerprint model. So, in the coming years, we are likely to see an increase in voice technologies used to verify customers’ identities and authorise their payments. But, that’s not all that voice technology can offer the financial sector. 

Responding to a recent consumer shift towards things like Amazon’s Alexa and other voice assistants, banks have found new ways to improve customer service using AI-drive voice technology. For example, customers can now get answers to common questions and set up payments through interactions with robo-advisors. And, despite being a relatively recent innovation, this year robo-advisors are expected to manage an incredible $2 trillion in assets. 

5. Big data 

Big data is being used more and more to provide a personalised and safer banking experience. One of its most common applications is for customer segmentation, and another is predictive analysis. This basically helps banks to better monitor risky investments and creditors to gain an in-depth understanding of individuals’ risk profiles. 

It is also often used as a way of more quickly detecting fraudulent activity. By using big data as a way of monitoring customers’ usual spending habits, it is far easier for financial and blockchain service providers to spot anything suspicious.