AI integration into the financial sector had been lagging prior to the Covid-19 pandemic. The sudden inability to conduct business in person catalyzed financial institutions and their partners around the world to automate many of their banking services, making them more customer-centric and efficient. What does the future hold for 2022? Here are seven top financial technology trends to watch out for in 2022. Konzortia Capital constantly looks to the future to keep you at the forefront of business and payment opportunities as they emerge.
1. Digital Banking
Due to changing consumer habits brought on by the pandemic, closures of physical banking locations are on the rise. In taking advantage of already existing technology, many benefits can be reaped by users who eschew brick and mortar for the virtual world. Digital banking offers an overall better customer experience, due to faster and more efficient services. Estimates from Statista; the statistics portal for market data; show that 64.6% of US citizens used some form of online banking in 2021, which indicates that online banking is becoming a transformational tool in finance. The good news is that digital banking is not just about going paperless and cashless: these underlying technologies have contributed substantially to the shift from a traditional centralized banking model to a more distributed, technology-driven one.
We’re not just talking about digital-only payments, we’re talking about virtual banking. Cloud banking and free-floating financial platforms are already changing the way people bank, and it’s not hard to foresee the day when most of the world’s banking will be conducted entirely online. At Konzortia we are already planning for the virtual banking world of tomorrow. Through our SBank platform, you will be able to perform all transactions with the security and advantages that online banking offers, without the hassles that come from in-person banking. We look forward to introducing the next evolution of finance.
2. Data Aggregation
Data aggregators will increasingly be responsible for facilitating the way data is exchanged between financial institutions and their customers. For instance, Envestnet Yodlee retrieves data from multiple sources, including investments and credit cards outside the originating financial institution. Expect fintech companies to use this transparency to provide their own customers with additional services.
3. Blockchain Technology
According to a Cision PR Newswire report, the size of the global blockchain market is forecast to increase from $3 billion in 2020 to $39.7 billion by 2025. Blockchain is undoubtedly the most significant financial innovation for digital transactions because its management is distributed- which means it cannot be controlled by a specific individual, company, government, or bank. Although companies worry about the security issues of this cutting-edge FinTech, Blockchain’s growing acceptance as a way to create a secure digital ledger cannot be ignored.
Blockchain implementation by financial institutions has been slow, but continues to be a significant trend. In fact, we are seeing more blockchain-based startups and increased use of crypto technologies across multiple business sectors. Let’s look at some of the reasons.
Blockchain is very secure, the use of blockchain in digital identity management (DIM) provides unbeatable security for both ends of the transaction funnel. Blockchain is increasingly being used to prevent fraud and manage regulatory and audit issues. Given these advantages, it’s easy to see why Blockchain is a growing trend to keep track of.
Here at Konzortia Capital, we are leveraging our digital financial ecosystem through the use of blockchain technology. Our platforms will be supported by an interconnected network that, through the benefits of blockchain, will ensure speed, security and transparency for all transactions.
4. Robotic process automation (RPA), artificial intelligence and adaptive machine learning.
From traditional outlets testing automated counselors to advanced algorithms evaluating credit profiles, we are seeing companies expand their use of intelligent technologies. The rise of artificial intelligence, machine learning and robotic process automation provides multiple benefits to those in the financial industry, such as reduced risk of loan default, better risk management, operational improvements resulting from data collection and analysis, and improved customer experiences.
Robotic Process Automation enables companies to achieve better work efficiency with a relatively small investment. RPA uses software robots (bots) to free up human resources and improve the way routine and repetitive business activities are carried out. Right now, this technological innovation is valued at $1.40 billion; expect it to reach $11 billion by 2027 according to Grand View Research.
5. Voice-Enabled Payments
When online banking was first introduced, no one anticipated how quickly it could evolve. Expect voice to become a reliable way for individuals and businesses to perform routine banking transactions just as quickly. The convenience of speaking versus typing will help customers quickly get the information they need. Improvements in natural language processing, natural language understanding and natural language generation will enable customers to use voice for banking transactions in such a powerful way that it will feel as if they are interacting with a human teller.
6. Big Data
This may come as a shock to some, but in 2020 alone, 1.7 MB of data were created per second. Financial technology providers and their customers generate vast amounts of data that can be aggregated to provide a more complete view of a customer’s financial status. Expect financial institutions to partner with data aggregators so they can use big data to improve customer retention and enhance services.
7. Buy now, pay later goes mainstream
With the rise in popularity of online shopping and new generations coming online, the adoption of new payment options is happening faster than ever. Take, for example, buy now, pay later solutions like Klarna and Afterpay, where consumers now have increased flexibility regarding payment options at check-out.