Explores 7 of the latest technological trends in Fintech
The fintech industry is constantly evolving and improving, and 2023 is no exception. The fintech space is predicted to multiply and reach $174 billion by 2023. The banking industry has recently experienced a massive increase in the adoption of fintech solutions as users become more tech-savvy. There are several emerging technologies in Fintech and I have highlighted some of the most dominant ones that will be seen in 2023 below.
Artificial Intelligence (AI) and Machine Learning (ML)
AI and ML can transform investments, payments, banking, risk management and related industries. AI involves the ability of machines to perceive their surroundings and perform actions that increase the chances of success. ML involves using algorithms to learn from data and identify patterns in it. Fintech firms can use both technologies to automate fraud detection and loan origination processes while providing more accurate insights into customer behavior. By leveraging these tools, companies can cut manual labor costs while increasing overall performance accuracy and efficiency.
More effective chatbots
More financial institutions will use chatbots to improve customer experience and automate their processes. While allowing humans to focus on providing higher quality and personalized services, chatbots interact with customers in real time to provide them with the information they need, resulting in greater customer satisfaction.
Based on information collected in 2022 through conversations between chatbots and clients, one should also see improvements in service delivery. Chatbots are thus more likely to be better at correcting grammatical errors and understanding slang and colloquial language.
Built-in economy
Embedded Finance refers to a wide range of financial services and products that are available through a specific platform. Users can better manage their finances without switching between multiple websites or apps when these services are built into an existing app or platform. The built-in finance model “Buy now, pay later” is growing rapidly. Customers can use this service to make purchases and then split the payments over time. As a result, experts predict that the embedded financial services market will grow by 40.4% per year in the next few years.
Voice activated technology
Voice assistance can help prevent fraud because the voice is the most natural form of communication and one of the hardest to imitate. Customers can use AI-enabled voice assistants to free up customer support staff to handle more challenging customer inquiries, set payment reminders, password resets, card activations and manage payments.
Use hyper-personalization to adapt to millennials’ needs.
Financial institutions realized that millennials’ financial goals are completely different from those of the older generation in recent years. They are more likely to seek rent-to-own agreements, mortgages and debt management solutions than they will seek business loans. The fintech sector will take the satisfaction of demands, preferences and choices to the next level by using AI to hyper-personalize the process, with the customer’s data used to drive the process. Using consumer data such as past purchases, reviews, clicks and experiences, AI helps develop patterns and draw conclusions that are then used by businesses. This can increase trust among existing customers while attracting new ones.
Software-as-a-service cloud services (SaaS)
According to reports, the SaaS sector is on track to reach $623 billion by 2023, with a compound annual growth rate of 18%. Businesses can use SaaS services to access and pay for cloud-based software applications without installing them on their computers or servers. It eliminates many associated fixed costs and frees up resources for organizations to focus on developing customer experiences.
Furthermore, using SaaS gives you access to powerful tools with enhanced data storage and management security protocols that would be difficult or expensive to implement for individual businesses.
Blockchain
Blockchain technology enables machines, organizations and individuals to securely transfer digital assets without involving a third-party intermediary or central authority. Since blockchain technology is decentralized, it can be used for various financial applications, including commerce, transfers and payments. In addition, blockchain will provide much-needed security and save money. For example, the absence of expensive intermediaries such as brokers and banks can significantly reduce the costs of international financial transactions.
Final thoughts
Fintech will remain a driving force in the future. We can foresee increased use of blockchain, SaaS and AI in financial transactions by 2023-2024. Automation and integration will become more advanced. As a result, consumers will have access to more tailored services that are more tailored to their specific needs. Companies that don’t want to risk being left behind must stay ahead as technological innovations continue to shape finance!
Author Biography:
Luigi Wewege is President of award-winning Belize, Central America headquartered Caye International Bank, published author of The Digital Banking Revolution – now in its third edition, has co-authored economic research presented before the US Congress and currently serves as a Instructor at FinTech School in California. He holds an Italian MBA from the MIB Trieste School of Management with a major in international business, as well as a BSBA with a triple major in finance, international business and management from the University of Missouri-St. Louis.
