2020 was not the best year for many industries due to the numerous COVID-19s. But what’s interesting is how quickly fintech grew during the pandemic. In the absence of physical contact, consumers relied on virtual financial services to obtain and pay money, and fintech solutions emerged.
The popularity of fintech has recently increased, with 96% of consumers worldwide acknowledging that they know at least one fintech service.
Let’s take a look at some fintech trends that are expected to impact financial services in 2021.
1. Autonomous finance
Self-financing is at the top of the list of excellent innovations in fintech. Manage business accounts, insurance, cable subscriptions, etc. It can be overwhelming. Self-financing eases the burden on consumers and automates financial decision-making with artificial intelligence (AI) and machine learning. As more people try to spend more time with themselves, they delegate recurring tasks to fintech solutions.
2. Open banking services
Traditional banks are the most important thing to protect people’s money. With the growing awareness of financial education, more and more people are looking to invest their money instead of leaving it to the bank. External financial institutions offer traditional banks their money for flexible, high-income investments, and consumers use it through public bank services. Open Banking provides external financial service providers with access to consumer banking information through API (application programming interfaces) suitable for investment purposes.
3. Digital banks on the network
The long lines at the bank annoy most consumers. Despite offering online banking services, there are still queues at the bank due to the limitations of online services.
The total extinction of physical contacts for bank transactions was far-reaching until the pandemic. Access to funds has practically become a necessity for survival, which the conventional banking system has not been able to fully address. A McKinsey study showed that digital payment is one of the best fintech products. The new generation of financial institutions has started using fintech solutions to provide affordable digital banking services that do not require physical contact. The growing competition among financial institutions to provide digital banking services is good news for consumers, as they offer a variety of attractive offers.
4. Financial literacy
The level of consumers’ financial literacy has a positive or negative impact on their finances. According to a Bankrate report, the average family in the United States has $ 8,863 in savings at banks or credit unions. Younger singles have fewer savings. Likewise, 55% of respondents in a recent study showed that they did not have enough money to meet their needs. The situation is different when consumers are better informed about their finances.
Fintech solutions are effective financial education tools. By collecting big data, consumers with bad finances can learn from those who separate their money. Fintech tools exist to guide customers through basic financial training to make wise financial decisions.
5. Speech technologies
Convenience is the keyword of fintech and the creators of the sector want to offer the best to the consumer. Generation Z is at the forefront of technological trends. Products that they find attractive have immediate success and the use of fintech technology generally makes solutions more attractive with the introduction of voice technology. Young people who like to chat are attracted to voice-activated tools in their online interactions. Fintech voice assistants with AI technology offer convenience and simplicity in managing financial resources. Voice technology also promotes secure payments using biometric authorization data.
The possibilities in fintech are endless, as innovation thrives on constantly changing technology. Consumers want to do more in their finances, and fintech solutions are encouraged. With a wealth of useful financial information, payment security, and fast, transparent transactions, fintech trends are fast becoming the standard in financial markets.