What would imagine the world in the near future is going to be like? The memories of standing in long ques and waiting for your turn are fast become a remnant of a pre-pandemic world. Imagine a life where everything would be delivered to your doorstep. Right from financial services to your favourite dream meal to a virtual tour of your dream destination. Sounds surreal, doesn’t it?
Then again, 2020 was a year like no other for industries around the world: A period of unprecedented disruption. However, in stark contrast to other industries, fintech reported growth despite the crisis. 2021 is expected to be an epoch-making year for fintech.
The steady confluence of various trends like the absence of physical contact, a reliance on virtual and no contact payments, and the increased need for virtual financial services has opened up new vistas of opportunity for fintech. Let’s take a closer look at some of the major fintech trends in 2021 and their impact on the overall finance sector, based on insights from Entrepreneur India.
When it comes to outstanding fintech innovations, autonomous finance tops the list. Managing various payments like utility bills, OTT subscription, wi-fi services subscription, phone recharges, and insurance premium can be daunting and tiresome. To make matters worse, missing payments on time in certain instances can even impact your credit score. This is where autonomous finance comes in and as the name implies it lessens the burden of financial decision making on consumers with the aid of machine learning and AI.
Traditional banks are most notable for safeguarding people’s money. With growing awareness of financial education, more people want to invest their money rather than keep it in the bank. Third-party financial institutions are giving traditional banks a run for their money in offering flexible high-income-generating investments and consumers are keying into it via open banking. Open banking gives third-party financial service providers access to consumer banking data via Application Programming Interfaces (APIs) for investment purposes consented to by the consumers. These third part financial providers have an advantage in open banking vs traditional banking solutions as they give consumers flexible high-income generating investments that traditional banks cannot match.
Most traditional banks are still making a digital transformation. Today, a completely virtual banking solution is something that most traditional banks are still struggling to offer. Fintech providers helped fill this need-gap by leveraging fintech solutions for convenient digital banking services that did not require any physical contact. This disruption and increased competition in the fintech space is paving the way for innovations solutions for customers.
Various technological innovations are finding novel ways to make banking hassle-free for customers. The steady consonance of these technological trends has led to exciting new products that the tech-savvy consumers of today find really appealing. These solutions are intuitive enough that people who are not tech-savvy can learn them quickly enough, due to the intuitive interface used. In many cases, AI-powered fintech voice assistants can go a long way in banking hassle-free. Fintech solutions ensure that advanced security is used via biometric verification and payment authorization.
The fintech space is on the front of innovation due to the adoption of many cutting-edge industry 4.0 technologies. They are fast establishing the standard for banking that is not only hassle-free but also secure. Traditional banks too are embracing fintech with solutions of their own or by collaborating with fintech players. The nature of this competition in the digital banking space is helping create rich and diverse ecosystems that help resolve consumer pain-points for banking in a seamless fashion.