Fininbox, an established banking software-as-a-service (SaaS) provider, has identified three main Fintech trends or developments that helped shape the financial technology industry last year. According to Fininbox, the three trends are: artificial intelligence (AI) became increasingly important among Fintech firms, a large number of traditional banks adopted Fintech solutions, and blockchain-based solutions were increasingly implemented across various industries.
Fininbox predicts that the Fintech industry is expected to reach over 4.5 billion active users by 2023. The market cap of the global financial technology sector is on track to grow to $310 billion through 2022, Fininbox estimates.
The BaaS provider points out that AI has been helping Fintech companies by monitoring and keeping track of various financial operations to handling daily user enquiries and is projected to increase by as much as four times in the next four years.
Anton Zujev, head of development at Fininbox, noted:
“Essentially, this (AI) technology automates various processes in digital banking. For example, AI-driven chatbots allow dealing with customer requests, digital services or more intuitively anywhere and anytime. It is also great to see how AI is being developed to increase fraud prevention.”
“The remaining scepticism towards disruptive financial technologies will inevitably be reduced as people start seeing clear benefits in usability improvements and overall industry effectiveness.”
The second main Fintech trend from 2019, according to Fininbox, involved large financial institutions implementing the latest financial technology solutions. Last year, JP Morgan, Bank of America and Goldman Sachs developed various digital products and services while working cooperatively with Fintechs.
Zujev believes these were all positive trends and developments but feels there’s still room for growth and improvement, noting that:
“Competing in this growing sector is not enough. Both traditional financial entities and Fintechs have a lot to learn from each other. While the former are more reputable and reliable because of experience, one should not forget the knowledge of digital and tech of the latter.”
Zujev recommends that traditional financial institutions and Fintechs should focus on collaboration, and “not rivalry.”
As noted by Fininbox, the third major Fintech trend in 2019 saw traditional banks and Fintech firms embracing blockchain tech as a tool for reducing operational costs across several different areas. Blockchain or distributed ledger technology solutions have the potential to make routine operations, paperwork and back-end tasks less time-consuming and easier to handle.
“Blockchain has been stigmatized for a while. It is understandable – both large banks and tech-savvy audiences were disappointed with many failures that followed the ICO boom.”
However, he pointed out that the development of the blockchain-based solutions appears to be picking up again. He predicts that the blockchain ecosystem will continue to grow further.