- Digitalization Is The Key To Future
- Expansion Is Inevitable
- Adaptation To The Current Trends
Even in the presence of the global pandemic and economic slowdown, the FinTech industry has grown exponentially over the past few months. While this is a result of strategic alliances and sheer resilience, most FinTechs have handled the financial crisis very efficiently. The COVID-19 era saw drastic changes in customer banking behaviours. Companies constantly geared themselves with technology. In a nutshell, the pandemic has made financial services more efficient, cheaper, and faster than it used to be.
Digitalization Is The Key To Future
Digitalization has happened at a rapid pace, equipping financial technology, enabling digital services and automation. Various experts claim that FinTech, out of all the industries, has benefited from COVID-19. Had it not been for the physical lockdowns and industrial shutdowns, it would have taken another couple of years to set up the digital model of finance.
Ecommerce Is The Primary Example!
A primary example of a market that has flourished from the advancement of FinTech is e-commerce. Social distancing and isolation compelled people to stay at their homes while the need for essentials and other commodities grew. The integration of online banking systems, unified payment options, and collaborations with several local and central banks worldwide resulted in a huge success.
Expansion Is Inevitable
During May, when the whole world was terrified due to the onset of the pandemic, global eCommerce sales touched $82 billion, which itself is a 77% rise over last year’s sales. It was possible due to several factors, and it is these factors that are going to emerge as trends in the post-COVID-19 world.
Contactless Payments Are The Current Trend
Contactless payments are certainly the future of transactions. It essentially means the absence of physical currency (which is a potential carrier of the COVID-19 virus) while making payments. The fact that all the classes of an economy are relying on it collectively asks for the technology to be reliable. Contactless payments are not only safe but easy and efficient. The global digital payment ventures have realized the importance of the same and are working at full pace to expand and improve the use cases.
Unification Of Different Currencies
One of the most significant advantages of modern Fintech is the unification of global currency. Businesses can not only function remotely, but all the finances and accounts can be monitored with no complications. The collaborations of FinTechs with overseas FinTechs have made this possible. A very recent example of the same is the agreement of DIFC Fintech Hive with Aviv, an Israel FinTech. It would support talent development and mutual referrals for providing better service.
Cybersecurity Would Benefit
Another major area of improvement would be cybersecurity. With better and advanced technological infrastructure, maintenance and data exchange (which also translates to money) would be safer than ever before. False identity frauds would cease owing to the enhanced identification system. This would benefit both the FinTech and the end customers that are associated with them.
Adaptation To The Current Trends
It is crucial to understand that FinTechs around the globe have to change to digital models as quickly as possible. It is the only possible way that could solve the ongoing fund crisis. After every market crash, governments worldwide start producing more currency bills to push more funds into the economic system. It is these funds that help function the common man, the businesses, the multi-national associations, and the government itself. That is how the economy works.
Due to a decreased flow of funds and a switch from physical to digital transactions, FinTechs have to incorporate tons of technology to access the digital currency in circulation. Perhaps the most immediate strategy of FinTechs worldwide would be to include more and more people within the circumference of their services. According to the World Bank, around 1.7 billion adults in the world are unbanked. However, about 66% of them own a smartphone that can help them avail of digital financial services. This is nothing but an opportunity for global financial service providers, including banks, digital payment facilitators, and unified payment systems.
Taking the Internet Of Things Into Consideration
Another trend in the upcoming decade would be enabling the internet ecosystems for contactless, digital, and instant payments. Until now, a user could carry virtual money on his smartphone. Imagine a world where a user’s car could also make payments at the gas stations. It would be connected with the user’s bank through the internet. An implementation of such tech is Apple Pay on Apple Watch. Any user could set up their Apple Pay account and make payments with the help of their watch.
The physical existence of banks would come to an eventual end. A customer can already open an account, transfer funds, and even monitor the transactions using their mobile phone. It would not only help banks cut costs (salaries of employees working at the bank) but would also speed the process, reduce the margin of human error to zero, and help control corruption as well. As discussed earlier, automation and adoption of financial tech is the future.
Targeting And Analyzing The Audience
In digital times, service providers need to know the whereabouts of their customers, and so is the case with FinTechs. The digital presence of a customer is marked by other analytical data about their demographic and psychographic patterns. Such data is priceless when it comes to actuary sciences. It helps create new schemes and offers to attract a larger user base.
Major FinTechs are trying and helping other SMEs and small FinTechs as well. The waiver of fees by PayPal from business accounts to bank accounts, removal of software subscription by Square, coming together of various trades and funding firms to support each other, startups, and other small scale businesses is a step in the right direction.