The future of banking: top 3 technology FinTech trends | Articles
Fintech companies are pushing the financial services sector towards the future. Fintechs have made operations easier, faster and more customer oriented. With the help of APIs fintech firms are developing cutting-edge products and services and bringing them to the hands of mobile users.
While traditional banking is still widely used, digitalisation is becoming more and more popular. So, if you want to stay on top of your game in the fintech industry, here are 3 trends to look out for:
Platformification/Banking as a Service
“The average person visits a branch maybe 10 times a year, but they’ll visit their mobile app 300 times a year.” – Jeremy Balkin, HSBC Bank USA.
Providing banking services outside the traditional physical locations, giving customers the opportunity to do business online, on their mobile devices, this is what Banking as a Service essentially is. The future of banking is lead by the growth of the tech-savvy customer base, which demands banks to be mobile and platform-based, driven by AI.
There is a change in how people interact with money. Banks will need to meet the demand for secure, data-driven, real-time platforms providing exceptional user experience. Platform fintechs will have an advantage due to their information sharing and openness models (fintech companies can provide easier access globally 24/7, offer more services, and a better understanding of customers’ needs).
KYC/digital identity/behaviour identification
“Someone knows your first pet, first boyfriend, favourite movie, etc. We need to get away from passwords and knowledge-based data and move to biometrics and risk-based behavioural authentication.” – Ellen Richey, Visa Inc.
With the expansion of big data and AI traditional identification methods like IDs, PINs and passwords are becoming old-fashioned and insecure. Passwords can be hacked or even guessed, and ID cards can be lost or stolen – that is why to survive in this digital age, and to keep money safe there should be a smart, decentralised, and individually controlled identity system.
An additional layer of security can be provided by the devices we use every day – enough to stop hacker attacks and convenient enough not to influence or change the usability of the banking app (risk-based behavioural authentication like typing speed, finger pressure, etc.). This way, KYC procedures and identity checks will no longer need to be performed face-to-face and can easily move online.
Open banking & APIs
Accenture Banking research shows that banks using Open APIs will profit from a potential revenue increase of 20%, and those failing to do so risk losing 30% to disruptive industry players by 2020.
Tech companies will spark competition in the banking industry because open banking is driven by customer demand, but its key enabler is technology. To get ahead in the open banking sector new business models will be required. The best platform banking example would be one that is connected with APIs in the cloud with a trustworthy UX.
Digitalisation is leading the change for financial institutions. Data and AI are the pillars of innovation. Cashless payments are becoming the new norm, and banks are aiming to provide online banking, mobile money transfers, and end-to-end financial services. The partnership between fintech companies and financial institutions will be a must for both parties to be ready for the digital future.
The financial services industry has no shortage of banking technology and integrator service providers, but access to licensed banking and payment products for these businesses is scarce and presents many challenges. Fintechs with great services and integrated banking connectivity providers are still facing major roadblocks when it comes to accessing banking services. Bankingblocks removes the need for fintechs to work with traditional banks and solves this industry-wide problem. Bankingblocks is a licensed, regulated provider of dedicated banking products, removing the need for traditional banks or license services to deliver full-scope products to your clients.
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