Five Fintech Trends to Watch in 2018
Fintech has become one of the main drivers of innovation in the financial sector. As financial markets move away from pen and paper systems, new technologies such as Data Analytics, Digital Banking and Artificial Intelligence have become synonymous with the industry.
If you’re a marketer working in Fintech you’re no doubt looking for new material on a daily basis to build your marketing and communication programme. We’ve put together a handy overview of the five biggest trends in Fintech to help you establish credibility and create powerful content for your business:
Cryptocurrencies and Blockchain
While cryptocurrencies and blockchain are very closely related, they are far from being the same thing. Various attempts have been made to use the blockchain technology without resorting to tokens. Originally developed as a secure public transaction ledger for Bitcoin, blockchain allows for safe exchanges ranging from currency to royalties and estate, as well as the recording of the transactions. This digital ledger is decentralised, generally based on a peer-to-peer network to manage the validation of “blocks”. Recorded data cannot be retroactively altered without altering all subsequent blocks, making the technology “secure by design” and suitable for a multitude of different uses.
With Bitcoin hitting the mainstream news after its value soared to extreme heights in 2017, the interest in cryptocurrencies and the underpinning blockchain system has also risen, paving the way for mainstream adoption of the technology. As their use takes hold and emerging trends appear – as with Initial Coin Offerings (ICOs) as a means of crowdfunding for start-ups – their momentum seems set to increase. This year will undoubtedly see a demand for a solid understanding and knowledge of cryptocurrencies and blockchain in the financial industry.
From AI to bill auto-pays, Chatbots to Algorithmic Automation, it looks like the future will see automation become essential not only to consumers, but to financial firms as well. The increase in automated forms of payment is only the tip of the iceberg; the step from direct debits to automated savings or financial investment recommendations is not a big one.
Investment management robo-advice has been making a breakthrough into what was an expensive, exclusive form of wealth-management, allowing access to a much broader audience. Algorithmic Automation, in the meantime, has been shown to be capable of outperforming even human expertise in the field.
The rise of mobile has probably been the biggest technological trend of the decade, so it follows that the financial world has had to adapt to the ubiquity of smartphones. Mobile wallets seem on track to overtake plastic cards and cash, and no bank or financial institution can avoid investing vast amounts of time and resource in mobile banking apps and similar platforms. When things don’t work as they’re expected to, customers’ dissatisfaction is felt and often shared on social media.
Mobile-first banking platforms and start-ups like Monzo have been disrupting the established order of banking and are already making progress with younger generations in ways traditional institutions don’t seem capable of.
Near-field communication technology has already become commonplace over the past year, and with contactless payments being the preferred transaction method for millions of consumers from the high street to the local pub, it looks to be one of the fastest developing fields in Fintech. NFC is relatively simple tech, allowing two chips to wirelessly transmit small amounts of information to each other. Its inclusion in smartphones with mobile payment services, such as Apple Pay and Google’s Android Pay, has contributed to its exceptional rise in popularity, and its evolution, from wearables to cards and mobile, is certain to grow in 2018.
Security and Privacy
Security and privacy have been the focus of much media attention, with scandals like Cambridge Analytica or the botched TSB system upgrade driving home the point that a laissez-faire attitude is not an option. While we can expect to see the government increase regulations around software and hardware, as well as issues surrounding data management, the industry has a responsibility to regularly monitor and enhance its security measures as cyberattacks become more intelligent.
With more and more devices connected, the chances of security and privacy breaches or hacking also increase. Better identity validation, as well as fresh approaches and strategies to tackle security threats will be at the forefront of technological development this year.
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