Fintech has been a hot industry for quite some time now. With mobile payment apps basically changing the way people pay for goods and services, it’s no surprise that fintech has made a lot of entrepreneurs in the space very wealthy.
Despite significant activity in the last few years, the fintech industry is still poised for growth; but, creativity will be key when it comes to introducing new products that compete with already established ones (think PayPal and Venmo). For example, companies like Perk Hero, a mobile payments solution that makes payments and rewards simpler and more secure for merchants and users across Canada and the United States, is filling a gap not addressed by the other processing players.
Perk Hero and others like it could become major market disruptors — and tomorrow’s tech entrepreneurs are taking notes.
“Mobile payment technology is one of the fastest-growing markets in the world, but I think you’ll start to see new market places emerge in fintech, as well,” explains Eric Schaer, a veteran financial leader and chairman of Omni World Holdings, a company that provides investment solutions in fintech, among other areas.
Eric Schaer also notes the numerous opportunities that exist to invest in tech companies, adding that, some of the CIS countries in which Omni operates in have deep experience in developing innovative technology, including space-related technology and robotics.
“Very important,” adds Schaer, “is that the educational system in those nations emphasizes STEM learning (science, technology, engineering, and math). This means that many of today’s students will become tomorrow’s innovators.”
Whether it’s in CIS countries or other locations around the world, one thing is for sure: the fintech of the future is going to look different.
Here are 5 ways fintech is advancing in 2020 and beyond.
More Businesses are Adopting Blockchain
Blockchain eliminates the need of a middle man to do asset transfers, and asset transfers aren’t limited to money. They could be titles, vehicles, home sales, etc. It also creates efficiency.
“From buying a home to completing a complex business transaction, blockchain tech compresses the steps that usually take days or weeks into one step that can be done in minutes. Not only that, blockchain is user friendly, so entrepreneurs in the blockchain space know that it is the future of fintech,” says Eric Schaer.
AI Will Continue to Improve Fintech
By increasing the accuracy of payment and lending, AI will also become a platform that provides the financial industry with embedded services to any company needing to subscribe to them.
Furthermore, Al analytics and machine learning processes are enabling fintech to look into customer data in new ways.
“What this means is that we will see more personalization come to fintech with platforms increasingly adapting to customer specifications,” Eric Schaer says.
Regulators are Showing Interest in Fintech
Because fintech can help to solve a lot of problems, there’s been a lot of progress when it comes to regulators supporting the technology. If regulators are on board, that means there’s going to be more opportunities to start fintech companies in the future.
Dilip Krishna, managing director and head of innovation for Deloitte & Touche LLP’s financial services businesses, explains further.
“In places such as Singapore, Australia, and the United Kingdom, regulators are actively looking to set up sandboxes to test scenarios and identify how the technology can be leveraged to solve problems. Many regulators are determining ways they can be a part of and enable the process, instead of just responding to it.”
Fintech will Become Safer and Smarter
Cybersecurity breaches are still a significant threat to organizations everywhere. In the future, the use of blockchains and machine learning processes to catch and circumvent attacks means that fintech systems will become safer and smarter. Through fintech applications, fraud and attack can be reduced, making for a safer future of digital transactions.
The COVID-19 health crisis has impacted fintech, as well. With more people staying at home, retail investors have been extra active on the stock market, trading at high volumes and influencing stock prices.
According to CEO Gordon Gao, the potential for growth in the fintech space is immense. “Businesses that can build on this trend to help people get their personal finance right will be able to reap massive benefits in the medium to long-term. As long as the companies are helping their users make a profit or reduce their expenses, they won’t mind paying for the services.”
Tomorrow’s tech companies should know: the future of fintech is digital. Starting 2020 with a global pandemic has only increased the trend towards digital services and future entrepreneurs will have to come up with new ideas to provide fintech applications through remote methods moving forward.