2020 has drastically changed the landscape of FinTech. All the changes and trends forecasted by the experts at the beginning of 2020 fell victim to the pandemic and the global crisis following it. To this day, the nearest future looks somewhat unclear. However, we’ve analyzed the existing data and tried to foresee what the future holds for this market in the second half of 2020. So, meet five major FinTech trends of 2020 to be aware of.
5 major FinTech trends of 2020
FinTech market is adopting this technology and is doing it much faster and successfully than many other industries in one way or another. In fact, PWC reports that more than two-thirds of financial bodies will integrate blockchain in 2020.
Blockchain creates a smooth and secure experience for customers by excluding the third parties from the payment process and adding another layer of security with cutting-edge anti-fraud systems.
Among other benefits of blockchain for the financial sector, is an opportunity to build secure and affordable P2P systems. Besides, with blockchain, companies get a chance to implement smart contracts which can potentially reduce the operational costs and improve the quality of all the businesses associated with them (for instance, payday loan agencies or insurance firms).
- Big Data.
Big Data is here to allow businesses to make data-driven decisions. With it, they can gather all the information on a customer available, analyze it, and create a client-oriented business model.
Moreover, the abundance of data allows the business owners to analyze and predict what services their target audience will need and be the first to offer these services.
However, as years go by, clients’ expectations grow by leaps and bounds, the competition strengthens, and one of the sure-fire ways for financial institutions to overcome it is by embracing the Big Data segmentation to offer the best-fitting product to the right audience at the right time.
This trend needs a short background story to get started. So, here is a bunch of alarming cybersecurity stats and facts:
– A hacker attack happens every 39 seconds.
– An average data breach cost amounts to around $3.9 million. And with all the reputation damages, this number is really much higher.
– Finally, ever since the beginning of the pandemic, the number of cyberattacks has grown by 300%.
These facts make both merchants and their clients nervous. Thus, one of the businesses’ biggest concerns these days is cybersecurity.
Hacks and data breaches are often associated with cooperation with third-party service providers. That is why vendors using third-party solutions lose customer trust.
To avoid that, we recommend merchants and payment service providers to focus on establishing transaction security along and preventing internal data breaches. Companies embracing these technologies will lead the competition in this volatile online market.
- The integration of AI.
This isn’t something new, but in 2020 this trend will gain its popularity more than ever. Already AI helps investors make data-driven decisions regarding their potential investments with higher precision. And not only investors embrace the power of AI to make informed decisions. Banks and creditors do it as well aiming to achieve better results and avoid any “human errors” by automating the processes. And we believe that in the nearest future we’ll see a significant increase in AI usage in the FinTech industry.
FinTech industry is evolving extremely fast. Only a decade ago, alternative payment methods were practically unheard of. This left an average user with only two options for payment – a credit card or a bank check. However, things have changed, and now a customer can pay in dozens of ways that best fit his needs.
We no longer need to carry a wallet when going shopping. And the technologies don’t stop just there. With clients being spoiled with all things contactless, innovations are very much expected to emerge and make our lives even simpler. Thus, we’re waiting to see digital-only banks. There already is one in Ukraine called Monobank, and it’s been a great success with 2.7+ million users already and counting. It offers everything a modern user expects – convenience, lower rates, and ubiquity. And we’re waiting to see more of such banks to enter the market soon.
Over to you
These are but a few trends to expect in FinTech 2020. We’re sure there will be more. Thus, we also anticipate the growth of cryptocurrencies’ popularity among FinTech company owners as well as the rise of Big Tech in the developing markets. And digitally mature companies must keep up not to lose the competition in this rapidly-changing and evolving market. Therefore, the competition will drive more trends and changes. And we can’t wait to see them in place.
Now, what do you think will be the major Fintech trends of 2020 merchants and business owners across industries can’t afford to miss?