Top 4 Trends That Will Transform the Fintech Industry in 2018
The fintech industry is on the rise, gaining momentum from strength to strength right through 2017 with a steady influx of developments across the private and public sector, alike.
Governments across the world are extending their direct and indirect support to the financial technology industry, which has formulated a collaborative pattern for fintech, and 2018 is destined to make this pattern visibly stronger, seamless and more appealing with the adoption of several new technologies.
Let’s have a sneak peek at some of the top factors that will drive the financial technology industry in 2018:
1.Blockchain technology to reinforce fintech
Compromized securities, theft, and data infringement activities have forever been the most common roadblocks for the fintech industry - however, with the rise in the adoption of blockchain technology, we now have several viable alternatives to safeguard financial transactions and associated data.
The security thing is, by the way, the original intent behind the development of blockchain, which was originally developed as a means to secure transactions in the cryptocurrency world. Despite being a public ledger, the blockchain is highly encrypted, with core functionalities that enable it to be heavily impenetrable for attackers.
A large number of leading fintech players in the industry are working on the deployment of the blockchain, thanks to its enormous security advantages. Even fintech behemoths like Barclays and HSBC have started exploring the capabilities of the blockchain, which means 2018 will be the year leading fintechs go all guns blazing for blockchain implementation.
2.The rise of cryptocurrencies and ICOs
Bitcoin value skyrocketed in 2017, cruising past USD 15,000, irrespective of the volatility and fluctuations. This mushrooming popularity and interest of Bitcoin has triggered a wave that’s steadily bringing the Bitcoin as well as other cryptocurrencies in the mainframe.
The most viable example of the application of cryptocurrency is that in the ICOs (Initial Coin Offerings), providing investors to the cryptocurrency industry. Investments in ICOs bypass the conventional fundraising methods to deliver an entry-level position to the uncertain yet flourishing world of Bitcoin and cryptocurrencies.
With ICOs, the financial technology companies are bypassing regulatory bottlenecks to speed up the fundraising process. For example, one of the first few prominent cryptocurrencies, Ethereum, managed to raise a whopping US$18mn in 2014, and the price valuation of the ether today is close to US$200.
The entire cryptocurrency industry has seen a massive investment of over US$87bn, and this figure is staggering, isn’t it? Over 20 new ICOs have been set up during the last couple of months, driving the ICO and cryptocurrency things towards legitimacy.
3.Never-seen-before growth in mobile technology
The use of mobile has continually been on a rise as opposed to desktops, especially in the social media and e-commerce sector, and new mobile technologies have provided a never-before comfort and security when it comes to mobile payments.
Leading fintech companies are now integrating mobile-friendly payment channels with a host of mobile-friendly features such as mobile wallets and QR codes to deliver rich user experience.
With customers increasingly preferring mobile payments over cash or defaulting to desktops PCs, it will surely galvanize the amount of innovation being witnessed in the e-commerce and fintech industry in 2018.
Mobile payments and banking is projected to cross US$92bn by 2019. Though the prevailing integration and innovation in fintech will surely bring numerous advantages to the retailers, consumers will emerge as the primary beneficiaries themselves, as is the case with anything driven mainly on consumer demands. And therefore, no wonder fintech will be the hotspot of attention for any mobile app development company this year, along with a steady rise in deployment of mobile apps for e-commerce and social media space.
4.Adoption of AI in fintech
Machine learning and artificial intelligence will keep on empowering fintech services and solutions in 2018. As per the recent Global Fintech Report 2017 by PWC, almost 30 percent of financial technology players have already invested in artificial intelligence - and with the immense ubiquity that AI possesses, the number of indirect investments in this domain is considerably higher.
The adoption of AI and ML will surely pick up pace in 2018, with more and more fintech institutions deploying these technologies for predictive analysis, automation, and much more.
As a real-world example of how AI can influence B2C ecosystems, the chatbot implementation is destined to increase in the coming years, to address customer queries in real-time, to automate customer interactions, and then some.
Artificial intelligence will emerge as a robust means to secure financial services and transactions, where the deployment of machine learning will simplify the analysis of patterns and implement powerful safety measures to neutralize potential security threats.
Though only time will reveal how these promising trends will give a face-lift to the fintech sector and customer behaviour, one thing is certain that the status quo in the financial technology industry today will witness a never-seen-before disruption in the next couple of years.