5 Things 2019 Holds for Fintech Businesses
With revolutionary technology upending the world of financial services at an ever-increasing pace, it can be difficult to keep up with what’s happening in the world of fintech.
Fortunately, Viktoria Ruubel, Chief Product Officer at IPF Digital, is here to help you stay ahead of the curve, looking forward to 2019 and the top trends that will dominate the industry over the coming year.
Banking in your back pocket
Mobile banking has been around for barely five years, but now it is ubiquitous. In the next five years, 72% of the UK population is expected to be banking via their phones. Paper money is dated – new transactional experiences define our daily spending, with contactless cards sharing a crowded market with mobile tech like tap-and-pay.
2018 saw millennials flocking to digital wallet providers like Monzo and Revolut. In 2019, this sort of tech will go mainstream, with a wider range of providers and services, all targeting improved customer experience, financial inclusion, and digital service.
The global fintech opportunity
The global payments industry processed over $1bn per day in 2017. In Latin America, and Sub-Saharan Africa, where traditional institutions shied away from investing, fintech firms have plugged the gap in the market.
The restrictions enforced by old-fashioned lenders have catalyzed the development of mobile banking. Mobile payments enabled by technology grant financial inclusion to users who wouldn’t meet the criteria for traditional banks
Smartphone adoption lies behind the accessibility of mobile banking – with a smartphone and internet access you can be part of the financial system without a bank account. More people than ever can contribute to the movement of money around the world, resulting in more opportunities for individuals to improve their financial situations, and for business to leverage credit for growth.
In 2019, fintech companies will recognize the massive markets that await outside of the traditional financial ecosystem.
Open Banking matures
Open Banking has won over its early sceptics and now has a strong place in the market, driven by the adoption of PSD2 regulation, new strategic partnerships, and increased customer expectations. 2019 will see open API reach maturity, with new products, customer experiences, business models, and opportunities created along the way.
Stripe, Mint, N26 – these are just some of the players using open API to offer products to both banked and unbanked segments. Meanwhile companies like Alipay and WeChat are building exciting new infrastructure which could drive the financial services revolution globally.
Applying artificial intelligence
The rapid advances in AI-enabled customer intelligence will drive the great leap forward in the 2019 financial industry, notably consumer lending. Chatbots and virtual assistants grew in popularity over the last two years, and consumers are increasingly comfortable using them to request information. Advances in voice tech mean that virtual assistants could soon submit loan applications on your behalf with a vocal signature.
Meanwhile, digital devices and pay for each other, to each other. Lending will become ‘real-time’ and AI learning will allow credit products to be personalized to each customer’s behavior.
For example, AI technology could analyse customer spending, and then suggest saving plans, helping consumers budget and borrow more sustainably. AI would then remind customers when they might need to borrow, how much to borrow and the schedule they should follow for repayments.
Securing data with biometrics
In developed global markets with high levels of smartphone use, biometrics are the next big step for financial services, in 2019 and the medium term as well. Biometrics will soon be integral to verification processes and payments – mobile banking apps already allow users to log in and pay with facial recognition, voice recognition and fingerprints.
The more financial institutions rely on digital, the more data security becomes a concern. Biometric technology one solution, maintaining the transactional security crucial to any sound financial environment.