Nowadays, technologies are developing at a breathtaking pace, and the financial area is not an exception. Robots and AI are utilized in top banks for first-class customer service: it seems like the future described in fantastic stories is already here.
Today the digitalization and shift towards online services don’t surprise anyone. You don’t have to go to the bank to borrow money. You just need to download a money loans app to your smartphone, and in several minutes you’ll get the money you want. But what is going on in the financial world right now, and what tendencies are influencing the economy? Let’s find out.
1. Shift Towards the Digitalization
Previously banks tried to open as many branch offices as possible so that the customers from distant regions could get access to the services. Today the trend has changed. Thanks to the internet connection, the client has unlimited access to the account and bank offers everywhere.
Top financial institutions reacted to this tendency quickly and concentrated on improving online services. They are changing their equipment to more effective and productive to satisfy the growing demand.
2. Cross-Industry Partnerships
The previous trend made it impossible for a financial organization to keep up with modern technologies without help. Therefore, they are expanding their relationships with tech companies. But the growing amount of communications is not limited by pure technologies.
Marketing campaigns, lending services, administrative duties are more and more often outsourced. This tendency can significantly change the whole financial industry in the nearest future. It means quicker and more effective services, convenience, and unlimited access for the customer.
3. Expanding the Artificial Intelligence Usage
Today financial institutions opt for raising the speed and quality while lowering the cost of the services. It means that people are not the best choice anymore; AI and smart robots play more significant roles day by day.
From live chats to anti-fraud checking, smart self-educating programs are used everywhere. The future promises growth of this tendency. In the banking of tomorrow, only the key positions will be occupied by human beings; the rest work will be given to machines.
Even today, machine learning and electrically trainable analogous neural networks are the focus of the industry leaders. This tendency will minimize the risk of mistakes and give quick, high-quality service to the customers.
4. Changing the Nature of Money
Conventional financial operations with bills and coins are slowly becoming a memory. The era of cryptocurrency is coming. It’s not just a transfer to the digital world; it’s a complete rethinking of the same concept of money. Cryptocurrency operations are safe and provide multiple opportunities unthinkable for conventional money.
Integration of the blockchains eliminates the necessity of different mediators, lowering the total cost of services. It leads to fundamental changes in the whole financial world organization.
5. Rethinking the Concept of Security
Easy access to bank accounts and functioning in the online world is convenient, but it causes multiple problems in terms of security. The question of the authentication process that will be the required safeguard against unauthorized access is on the front burner.
Security systems should provide issue loss access and safety at the same time, and it’s not a simple task. With the growing popularity of digital payments and online banking, not only internal systems of financial organizations but also the customer’s personal devices and smartphones need decent protection.
6. New Kinds of Payments
COVID-19 pandemic sped up the integration of new ways of payments and significantly raised the share of:
- contactless payments;
- online banking;
- usage of digital wallets.
This tendency remains strong and will cause further innovations in the nearest future. It’s especially true for mobile payments. Hey will become more convenient and safe for the customer, contactless payments will be the main way to pay for goods and services.
7. Changes in the Balance of Power
The new financial era changes the relationships in the industry. Traditionally old and new financial institutions were competitors, but today it’s not beneficial for either of them. Old institutions have a well-organized structure and resources for successful work. New-age companies bring innovations and change the approach to customer services and financial operations.
So, both sides have something to offer to the clients and to each other. It means that the future of the industry is in collaboration and partnership, not in competition. We’ll face complex unities instead of multiple separate organizations in a few years.
8. More People Inclusion
Clients are still the main focus of the fintech organization, so instead of further integration of innovation, they try to include social straits, which are currently far from the digital world. Without this integration, millions of people will be pushed from the mainstream financial services and become marginalized.
That’s why special programs for such categories as refugees and illegal immigrants are in high demand. With their successful realization, more than one billion people worldwide will get access to money flows.
9. Emerging of New Leaders
In the era of the money revolution, countries with developed technologies and a focus on digitalization have all chances to become world financial leaders. China has the strongest position with an incredible amount of internet users and a well-organized digital payment system.
In previous years China got the leading position in the area of eCommerce, and the financial system of this country is continuously developing.
10. Growing Role of Smart Contracts
We all can imagine the procedure of a typical agreement: negotiations and signing the papers prepared by the lawyers. Today the process can be much simpler and reliable. The contracts of the future will be computer programs signed with crypto keys and stored on independent servers, ensuring compliance with the conditions and agreement fulfillment.
All major tendencies of the upcoming era of money revolution will cause multiple challenges for the FinTech companies and change the financial world as we know it. But for the customer, these are the positive changes.
The availability of financial services will be growing, and their cost will be lowered. Here are some uncertainties, though. The topic of cybersecurity has never been so hot, but this causes technology development and serves as a force for financial system evolution.