Fintech Trends to Watch For in 2020 | Techfunnel
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4 Fintech Trends to Watch For in 2020

Fintech Trends

Fintech seeks to improve and automate the use and delivery of financial services. At its core, it aims to help everyone from consumers to business owners and companies manage their financial operations in the digital world through, faster, more secure and decentralized blockchain technology.

It has played a significant role in bringing banking to those who don’t have a bank account. In places where access to banking can be limited, millions in Africa are using phones and credits on phone accounts to transact without using a bank account. With disruptions like this Fintech is a growing phenomenon.

Here we will go over 4 trends that are looking to take shape by 2020:

Robotic Process Automation

While automation in business is nothing new, robotic process automation (RPA) can automate tasks that people usually perform manually like entering data or producing reports. Additionally, RPA is specifically designed to integrate into existing workflows and interact with existing user interfaces. This means that with the help of RPA banks and insurance companies they can easily integrate their automated processes with those which are still done by humans, with the end result being reduced processing times and increased efficiency.

What is truly groundbreaking about this process is that these ‘robots’, with the help of artificial intelligence (AI) algorithms, are able to increasingly automate traditional processes done by humans like filling digital documents, completing forms and other more tactical operations tasks.

Easier and Faster Alternative Loan Options

Far from being just trendy buzzwords, comparatively fast and easy online loan options could be a larger threat to traditional banks than previously expected. A Bloomberg story on online installment loans details how the formerly niche offering became a red-hot market in a matter of five years. These loans are aimed at people who, for some reason or another, have limited access to bank loans but need to pay their bills.

In much the same way, LoanMart Ohio typically caters to borrowers who need to address emergencies or other unexpected financial issues, with only their car titles to serve as collateral. Here in Texas, a variety of options are also available for those looking to borrow anywhere from $250 to $2,500, with flexible payment terms.

These innovative alternatives to banks and their often-difficult loan requirements are catering to a growing number of Americans. They also illustrate that Fintech doesn’t have to be shiny and glamorous to disrupt the industry it just has to be easier than the current system. Proof of this is the introduction of peer-to-peer loans and Fintech companies are disrupting the lending process by eliminating the need for a deposit, instead, individuals earn interest by lending to others. This way, financial institutions can improve credit appraisal models and their online lending strategy, and offer new products at lower costs than traditional banks.

Increased Use of Fintech by Banks

In an attempt to address the increasing risks posed to a technologically digitalized banking sector banks will be making use of more Fintech, particularly when it comes to dealing with institutional risk. And as we’ve seen, in this day and age of growing alternatives to traditional banking systems, banks are trying to stay at the cutting edge of current technology. As one of the largest banks in the U.S. Bank of America (BoA) has spent about $3 billion on technology every year for several years.

This is because like other banks they’ve had to contend with new Fintechs that have been disrupting financial markets in areas like consumer banking, lending, and payments. Areas that are, in large part, the bread and butter of traditional banking. As such, BoA has sought to partner with emerging Fintech in traditional banking aspects as well as for cryptocurrencies, to provide solutions to everyone from the paycheck consumer to those with more complex wealth management needs.

Blockchain in Global Finance

When it comes to a global reach through a fast-decentralized system with low processing fees, blockchain remains the disruptive technology changing the face of financial transactions. China and the U.S. currently lead the world in blockchain use which will ensure wider adoption, with 77% of financial services companies looking to see live production systems as early as 2020. It’s part of the reason that investors have been pouring billions of dollars globally to increase the reach of blockchain services.

But another, faster-growing reason is the ever-increasing users of blockchain wallets, which Statista reports now stand at 40 million worldwide up from just 11 million in 2016. Blockchain’s distributed ledger technology is also what is attracting investors as it provides an immutable and decentralized option free of limiting regulations and exorbitant fees.

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Amy Adams is a bitcoin and blockchain guru. As a former investment banker, she is now a freelance consultant on everything fintech.

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