As FinTech gains widespread adoption across the world, different technologies have been applied to suit the needs of the industry. They include consumer demands, regulatory approvals, security enhancements, and competition. The advanced technologies running the ecosystem have become smarter and more adaptable. The key trends for the future of FinTech can be classified into the following categories: Artificial intelligence (AI), Cloud Computing, Blockchain, the Internet of Things (IoT), and Open Banking. Let’s dive into these FinTech technology trends in more detail.

Key FinTech Trends

#1: Artificial Intelligence for Smarter Solutions

90 percent of FinTech firms are already applying AI in some form, according to the Cambridge Center for Alternative Finance. The most potent aspect of Artificial Intelligence is that it learns how to work efficiently and better than any human can. By learning from data, AI models are able to efficiently perform tasks without further human intervention. This results in work being done quicker, more efficiently, and more accurately, making FinTech solutions smarter.
Some of the use cases of AI in FinTech include the following:
  • Purposing chatbots into virtual assistants to answer customer queries, offer suggestions, and complete repetitive tasks
  • Deploying Natural language Processing (NLP) to enable human-like communication with virtual assistants and enhance customer engagement
  • Using AI algorithms to detect suspicious activity to prevent fraud, such as flagging suspicious transactions or insurance claims
  • Customer segmentation to offer tailor-made products based on risk score profiling and to facilitate faster loan approvals
According to Mordor Intelligence, the value of the global AІ market is expected to reach $26.67 billion by 2026 as more companies embrace it as an integral part of the business.

#2: Cloud Computing Improves Security

In addition to speed, scalability, flexibility, and faster deployment, cloud computing considerably boosts security through automated and embedded security controls. FinTech is always associated with the risk of managing sensitive data and complying with industry regulations. Cloud data warehouses have proven to be more reliable than traditional IT ecosystems. Thanks to such features as data encryption and zero-trust verification, the cloud more reliably protects against data leakage and fraud.
Now that cloud technology is more accessible than ever, it is changing the way we live our lives. It enables organizations to unlock digital transformation use cases by providing a path for security-rich data sharing and dynamic applications that can be used in any industry or sector of business, no matter what you’re doing now!
Cloud technology also contributes to the scalability of FinTech solutions and will greatly impact its future. Any startup that wants to grow requires an infrastructure that can grow with them. Cloud infrastructure is easier and cheaper to upgrade. In addition, this agile environment allows businesses to more easily adapt to market changes, including consumer demand, regulatory compliance, and implementation of new technologies.

#3: Blockchain Disrupts Outdated Financial Systems

The power of blockchain in disrupting legacy financial systems is massive. Through the application of Distributed Ledger Technology (DLT), it is possible to record, share, synchronize, and distribute data across different data stores in real-time. Moreover, it eliminates challenges associated with outdated financial systems, such as the dependency on a centralized system which means a single point of failure, lack of trust, and higher operating costs. This results, among other benefits, in more revenue, improving the end-to-end experience and reducing business risks.
The introduction of blockchain has led to an increase in the investment appetite of traditional players such as institutional investors, increasing the capital allocation of digital assets in their portfolios. Today, the most progressive FinTech solutions have blockchain modules to attract an audience of crypto enthusiasts and enter the rapidly growing cryptocurrency markets.
Traditional financial institutions are also not missing out on this trend and should keep an eye out for this in the future of FinTech. Initiatives such as the central bank digital currency (CBDC) are being tested by central banks around the world. Another example is J.P. Morgan using blockchain to improve transactions by reducing the payment processing and verification time for large payments.

#4: IoT Сollects Customer Financial Data More Efficiently

Link: https://www.iotforall.com/technologies-shaping-future-of-fintech?utm_source=pocket_mylist

Source: https://www.fintechnews.org/technologies-shaping-the-future-of-fintech-2/