By now the world has come to accept that technology is on the verge of becoming the ultimate enabler for financial services, slowly but progressively eliminating the need for traditional, physical finance as we know it. FinTech applications have seen tremendous improvements in a relatively short time, and innovation is always on the horizon in this industry. We are conversing with bots almost organically and we have limited our interactions with fellow humans to a minimal level. Now that 2019 is coming to a close, it’s time to look at the rising FinTech trends to watch out for in 2020.
Dissipating Traditional Institutions
As finance, like most other industries, rides the digital wave as we go along, some physical elements related to banks and other financial institutions are being eliminated as technology takes over, saving time, effort and perhaps most notably useless costs. Aspects of traditional banking like payroll, insurance and securities are becoming digitized and seamlessly automated. Digital-only banks are replacing their brick-and-mortar counterparts in favor of saving incurred costs on users, and the best of those banks share these benefits with their customers, whether through higher returns, lowers fees or other efforts. FIs need to adapt to that rapid change while upholding compliance and maintaining good favor with other governing agencies. RegTech (regulation technology) companies are increasingly depending on AI applications to combat fraud, money-laundering and identity theft faster and more efficiently; a feat that humans can hardly compete with in terms of speed. There is much opportunity for investment in the RegTech world.
Rising Online Trading
Black box trading, a rules-based, fully automated method of engaging the financial markets that relies on algorithmic and low-latency technologies, has had its ups and downs before. However, today there is a more personalized approach to trading online.
Enter copy trading, a crowd-sourcing approach to your online portfolio that basically entails following your favorite investors and mirroring their investment efforts through the allocation of your chosen percentage. It has the potential to allow you to discover investment opportunities that you were previously oblivious to, in addition to gaining valuable insights in real-time.
Contemplating Mergers & Collaborations
As financial institutions strive to stay relevant and cope with fast-paced digital growth, they are likely to establish partnerships, collaborations and merger efforts with promising FinTech entities. Being inflexible and trying to operate under traditional standards is a move that will most probably prove unsuccessful for financial entities; they need to be vigilant in developing fresh digital marketing strategies and product offerings to successfully ride the wave and not crash into it.
2020 should prove to be even more FinTech-centric and digitized, and financial entities need to either evolve beyond their brick-and-mortar presence or complement it thoroughly with robust and secure digital initiatives, securing their future and driving themselves forward into the inevitable digital future.
2020 Trends, FinTech Trends, Financial Institutions, Traditional Banking, Online Trading, Merger, Partnership, Collaboration, Black Box Trading, RegTech, Artificial intelligence, AI, investment