Hot as a pie: Fintech trends 2018

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Shane Gau

Lead Digital Transformation Consultant

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    Fintech continues to develop rapidly, and now it’s not just a crossing of finance and technology. Modern finteсh represents not one but several areas, which, however, are often closely interrelated.

    Among them, we can mention the technologies of asset management, insurance, legal technologies and such subcategories as crediting, analytics, digital identification and cybersecurity, crowdfunding, robotized advisers, neobanking, etc.

    What’s important now

    The goal right now is to access the “millennials”, young people born after 1981 and characterized by deep involvement in digital technologies. Nevertheless, this access should be accompanied by quite prosaic things: for example, the profitability of a financial institution.

    Those days when banks considered fintech companies as competitors and violators of tranquility have passed. Now banks perceive enterprises operating in the field of fintech as partners in the world “digital first”, which can be translated as “digital technologies first”.

    Building the world “without cash” opens up huge horizons for the financial companies. So, some trends in the field of financial technologies for 2018 look like this:

     

    1) The rise of new chat-bots

     

    So far, they haven’t been used extensively to interact with bank customers. But why? Such applications don’t get tired of work, don’t lose patience from communicating with the client, and don’t leave the workplace, “because of dinner”. The evolution of their capabilities is more exponential rather than linear. Thus, in 2018, as expected, there will be new, more advanced chat-bots that will communicate more qualitatively and respond faster.

    Chat-bots slowly but steadily displace mobile applications, although more recently online banking seemed to be the pinnacle of comfortable and fast cash operations. So, in just 10 years, communication with robots has become our new daily routine. One of the most promising is FinMatex – a multifunctional chat-bot, that may explain the financial terms, will inform about the situation on the stock markets, as well as monitor tools for further analysis.

    2) A wide use of “blockchain” technology.

    Blockchain technology is the number one theme in financial technology over the past 50 years. It allows you to re-look at how the interaction with finances occurs. Many banks have already started pilot projects in the use of this technology, and it is expected that their number will only grow.

    So far, the main players and platforms for customers still haven’t appeared, and it is relatively hard to write programs. However, everyone who works closely with technology believes in it. At the same time, there are more situations when initially ardent opponents of the idea become its apologists. It also means that if you study the query in more detail, it becomes clear that this technology, with all its current shortcomings in the speed and heaviness of architecture, has a bright future.

    3) Use of artificial intelligence

    Artificial intelligence is no longer science fiction. It is what you already have in your pocket like «Siri» or «Google Now».

    AI applications are used to find bottlenecks in financial business processes for a marked increase in their effectiveness. Although services based on AI in fintech face data quality problems, and algorithms still need to be improved, new technologies will change the industry beyond recognition.

    4) Machine Learning and personalization of offers for each specific user

    In 2018, banks will increasingly use the technology of Machine Learning and analysis of large datasets. As a result, banks will have the opportunity to analyze in more detail the needs of their customers and offer personal banking products. At the moment, the use of Machine Learning and blocking in the fintech project allows you to increase the cost of the project from two to five times.

    At the current stage of “IT power” in general is enough to offer almost every customer of the bank products that meet his needs. For this, data on the previous experience of interaction between the client and the bank are used.

    5) Information security

    Developing new tools, features, and services, start-ups, and large companies need to think about security at the architectural level. Otherwise, the application of products in banks and the financial sector, in general, will require too many improvements and will not be profitable.

    Fintech-branch is developing at a tremendous pace, changing the financial infrastructure and even approaches to doing business just in front of our eyes. At the same time, there are only two key requirements to this industry: improving the efficiency of the financial system or an individual business and security.

    Biometric technologies now are what people are focusing on. They ensure the fulfillment of both of these requirements and are perfectly combined with the latest achievements of the fintech. The most obvious area of use of biometrics is the operative and reliable identification of the client at different steps and in different scenarios of financial interactions.

    So what to expect?

    Like any technological revolution, it is impossible to predict all the innovations and trends that we can expect in this industry. However, these five are some of the most likely financial technologies that we look forward to in the nearest future. Very soon they are going to change the way that almost everyone spends, saves and invests money.