The year 2017, that is quickly passing into the history books, has turned out to be quite the year for the FinTech industry. The year has become a milestone for FinTech companies as, according to EY’s report, 33% of clients in 20 different countries currently and regularly use a minimum of 2 FinTech services. In other words, the industry has hit the early majority adoption stage in 2017. The demand for FinTech software keeps expanding exponentially, and FinTech companies should take advantage of the industry’s key perspectives in 2018 to stay at the top of the game and create new markets. Following the trends is a matter of survival for some while they are the key to prosperity for others. From a diverse range of blockchain-based solutions to Machine Learning and AI, Big Data and next-generation chatbots, financial institutions have to keep implementing these and more FinTech solutions if they want to keep up with the increasing demands of millennials. Let’s take a look at an overview of the most prominent trends that we anticipate in 2018.
#1. Blockchain Technology – The New Mainstream?
BitCoin’s rise to $10,000 per token in value has been one of the prevailing FinTech topics over the past few months. Besides, Bitcoin’s popularity has also made blockchain technology the center of attention for some legacy financial intuitions.
Originally, blockchain technology was developed as a means for securing cryptocurrency transactions from hacking attempts. Each cryptocurrency transaction is a part of a block in a chain of transactions and is connected to the previous and next transaction. Thus, changes to a previous transaction require being approved by all the stakeholders that are a part of the chain. The system as a whole is also heavily encrypted with unique access keys for the stakeholders. Consequently, hacking into this system is considered impossible.
When it comes to regular currency transactions, we transfer only pieces of code from one account to another. Black Hat Hackers can duplicate the necessary code and “spend” the money embedded in that code multiple times or modify the code to add several digits to the amount of money available.
With security still being a challenge, more and more legacy financial institutions are considering implementing blockchain technology into their banking systems due to its unbeatable security mechanisms. Surely, with blockchain technology implemented, there will be no room for human error/mischief leading to massive hacks.
Some of the giant banks are already experimenting with the technology (among those are HSBC and Credit Suisse). Thus, blockchain technology implementation has the best chance to become one of the most demanded bank outsourcing trends.
#2. Mobile Technologies – Development Will Continue.
Millennials don’t have enough time to go to a bank in the modern world. They prefer being provided with all the necessary banking services 24/7/365 regardless of where they are at the moment. Other generations are adopting this trend rapidly due to the undeniable convenience of having every necessary service available in your pocket. Mobile technology development continues to be on the rise in the FinTech industry.
The key advantages of using the mobile-based approach that developers should keep in focus are 1) faster services, especially when it comes to cross-border transactions as many entrepreneurs depend on the speed of such transactions; and 2) user interfaces that include as few steps as possible.
Taking into account the quick rise of cryptocurrency popularity, developing blockchain-based mobile payment systems is also a promising outsourcing trend of 2018. These systems aim to allow their clients to buy and sell cryptocurrencies instantly while maintaining an ‘incognito’ status.
Moreover, the constant demand for speeding up services drives the development of instantaneous smartphone payment software (e.g. Android Pay, Apple Pay, etc.).
The demand for mobile-based technologies is a part of a bigger trend: the merging of physical and digital banking together with other financial services. Consequently, FinTech companies will become allies rather than rivals for legacy financial institutions leading to a significant increase in FinTech outsourcing services traded worldwide.
#3. AI And Machine Learning Are Here To Transform Financial Services.
AI and machine learning are the top perspectives that traditional financial institutions should and are looking into in 2018 by partnering with FinTech entrepreneurs for outsourcing.
AI and machine learning are at the top of many financial companies’ research lists due to the vast benefits of using them in providing financial services. These technologies allow companies to gain insights into the expectations, preferences, and behaviors of their clients. This data (stored and operated as the Big Data) is the key to offering specific target groups the services and products they are highly likely to adopt. Consequently, using AI and machine learning is a promising path for entrepreneurs for boosting profits.
Another advantage of using AI and machine learning is the opportunity to develop automated personalization software. It operates by gathering the Big Data about each client and analyzing it in order to personalize what they will receive on their devices. It makes the whole user experience more personal and, consequently, more pleasantly profitable.
Last but not least among the upcoming outsourcing trends, AI can be used for the development of next-gen chatbots. These chatbots are considered to be the future of interacting with clients by many due to their long-term cost-efficiency and availability 24/7/365. Although chatbots possess the intelligence of a three-year-old child as of now, machine learning technologies are expected to help them make a leap in intelligence and interaction quality in the next few years.
#4. Investment And Financial Planning Software Is To Gain Popularity.
Investment and financial planning software are one of the prospectives FinTech software companies shouldn’t miss out on in 2018. The demand for such planners or automated advisers increases as the world gets busier and busier.
Since there are online stock trading services available now, customers are in need of advisors on how to invest their hard-earned cash efficiently. Currently, those advisors are employees of investment companies. Yet, AI and machine learning can easily replace them if implemented into investments advisors software.
Financial planning is already in a high demand, and this trend will keep expanding in 2018. Key improvements that should be expected are implementing personalization and automation in the planning and gathering of financial information processes through AI and machine learning technologies.
The Bottom Line
The key FinTech trends in 2018 are AI & machine learning technologies, as well as the blockchain technology and the rise of mobile software solutions. All of these can completely transform the customer experience. Surely, the Big Data technologies will be in high demand as well. Yet, keep in mind that the FinTech industry is unpredictable as new technologies or new applications to the old ones arise and take over the market monthly and yearly. Stay tuned for new, spectacularhorizons, dear reader!