What Is The Next Big Development In Fintech?

As we continue to evolve in the financial industry, Blockchain, AI, Chatbots, and Embedded payments are all emerging as major trends. However, the next big development in fintech is still a mystery to many. In this article, we’ll discuss what we think will happen in the future.

Blockchain

Blockchain has the potential to significantly reduce transaction fees, making financial transactions cheaper and more efficient. For example, a $10,000 international transfer can now cost as little as $1 when using blockchain technology. Furthermore, it will reduce worldwide payment delays and make the entire process safer, more transparent, and immutable.

A new generation of technology can also be used to automate services, such as investing and insurance premium payments. For instance, blockchain-based smart contracts can automatically process insurance claims. For example, Etherisc is a blockchain that allows airlines to automatically pay passengers when flights are delayed, eliminating the need to file claims manually. Another important fintech innovation is biometric technology. These tools can be used to simplify online transactions and authenticate customers. This will eliminate the need for passwords and simplify account access.

The banking industry accounts for a significant share of blockchain market value, with 29.7% of global transactions involving the technology. Other sectors that have seen significant adoption of blockchain services include process manufacturing, discrete manufacturing, and professional services. Meanwhile, the number of blockchain wallets in circulation globally has risen significantly. According to Statista, approximately 40 million people use blockchain services in some form. The numbers indicate that blockchain is here to stay.

AI

For banks, the next big development will be Artificial Intelligence (AI). With AI, a financial institution can automatically handle a wide range of transactions, from customer service to financial advice. Using deep learning algorithms, AI can understand language and respond in a natural way. For example, a chatbot employed by Swedbank can handle over 2 million transactional calls a year. Although most customers are already aware of chatbots, most are unaware of the importance of NLP in AI.

Another major use of AI in finance is underwriting services. AI-powered models can assess a client’s credit risk and then design an offer based on the results. This will improve efficiency and the customer experience. Manulife, a Canadian financial services group, has already implemented AI in its underwriting services. This technology is crucial for bridging Canada’s protection gap.

Chatbots

With the Covid-19 pandemic putting municipal organizations and the government under increasing pressure, chatbots are a natural next step. As a result, they can help users with everything from basic questions to medical conditions. In addition, chatbots can free up time for more complex tasks such as providing support to the unemployed.

Managing money is complicated, whether it is dealing with long loan agreements, multiple credit card statements, or managing a bank account. While many people have to manually deal with all these tasks, chatbots can help people navigate the process and understand what is going on in their finances. For example, the chatbot Erica from Bank of America can help customers by providing account balance information, advising on how to save money, and providing updates on their credit reports. In addition to these functions, Erica can also assist customers with transactions.

The use of chatbots for financial services is growing. They can automate simple tasks like answering questions or qualifying customers, freeing human workers to handle more complex tasks. With websites becoming larger and more complex, consumers are complaining about the difficulty of finding simple answers to questions.

Embedded payments

Embedded payments, which allow non-financial companies to offer financial products and services to consumers, are one of the most promising developments in fintech today. This market is expected to grow to $7 trillion by 2030 and $230 billion by 2025. While embedded payments will take off first, companies will also eventually offer credit and debit card options, insurance, loans, and asset management directly to consumers. Embedded payments are driven by a variety of factors, including the desire to improve customer experience and drive new revenue streams.

Embedded payments simplify payments and eliminate the need for customers to re-enter credit card information in each transaction. They also enable companies to offer customized insurance policies that can offset the costs of product or service purchases. For example, ridesharing apps can use embedded payments to eliminate the need for customers to carry credit cards or cash, and customers can pay instantly after completing their journey.

Autonomous finance

With consumer demands changing faster than ever, and rivals becoming more unconventional, it’s important for companies to find ways to stay ahead of the curve. Autonomous finance is one way to achieve this. There are several ways that CFOs can use this technology to their advantage.

The idea of autonomous finance is to use financial technology to provide services to customers that they can trust. This technology works in two ways: it helps customers make instant decisions about their money, and it helps them to automate tasks that would have otherwise required human intervention. By using artificial intelligence and automation, autonomous finance can help customers save money, make investments, and manage debt.

Autonomous finance can also automate the back-office processes of a financial institution. For example, blockchain-based smart contracts can automate fund management. Another example is Etherisc, which uses smart contracts to automatically pay airline passengers if their flight gets delayed. This innovation eliminates the need for people to fill out claims manually. Another trend in financial technology is biometrics. This technology can identify you and your identity, making the process of accessing your account more convenient and secure. Ultimately, biometrics can replace the passwords that many people use to gain access to their financial accounts.