Someone has rightly pointed out the fact that there was a time when Fintech used to be back-office support. And now, it is certainly a defining industry. Everyone can agree that they can’t be more specific and right.
Gone are the days when venture capitalists used to hesitate or barely invested in the fintech sector. But over the past few years, things have changed dramatically.
Fintech Industry At A Glance
Not only has the private venture capital skyrocketed, but the investors have started realizing the worth of cryptocurrencies and bitcoins. In fact, over the past few years, chatbots, crypto assets, blockchain, and artificial intelligence have played a crucial role in revolutionizing the trade media.
In fact, despite the economic chaos and turbulence brought about by the Covid-19 pandemic, the fintech industry still flourished in many world regions.
Thus, it wouldn’t be wrong to say that the future of the Fintech industry has never been brighter.
Here we have some predictions that can help you foresee what the Fintech industry has for you in the upcoming years.
Let’s get started.
Digital Banking Is Definitely A Rising Star
Thanks to advanced technology, today, banks have entered into the virtual world. Peer-to-peer transfers and contactless transactions have never been this easy. Not to mention, the financial world has quickly grabbed the chance of exchanging Bitcoins and cryptocurrencies.
It is also predicted that digital-only banks or Neobanks will become more prominent in the upcoming years.
For those who don’t know, Neobanks are financial institutions that exist and run only online. Unlike traditional banks, these banks offer minimal functionalities and allow the customers to enjoy the perks at lesser fees. The best part of these banks is that they provide lower and better interest rates.
But with perks come challenges. Automation of processes and digitalization of data actually contribute to making fintech systems vulnerable to cybercrimes. Hackers can easily gain access to your account information and misuse your personal as well as financial information for their own gains.
There are many financial fraudsters lurking out there who are waiting for their victim to register into their fintech disruptors. Believe it or not, it is one of the leading internet crimes in the world. So, it would be best to be very careful before associating with any Neobank to avoid mish.
AI Is Revolutionary
Financial institutions have always been early adopters of the latest technology. And it is definitely not surprising that fintech startups and organizations are the first ones to embrace AI.
Banks and other financial institutions are using advanced technology to offer faster and better convenient services to their customers. It is also well poised to deal with cybercrimes, financial frauds, and other potential threats.
In fact, artificial intelligence is projected to revolutionize the industry by reducing operation costs by 22% by the end of 2030. This means that financial institutions will be able to save up to $1 trillion in the upcoming years.
Not only this, but AI is also a huge hit amongst the newbie or aspiring traders. You can use games to learn how to practice stocks so that you can brush up on your trading skills and know what it is all about. Such games use real-life data and charts to make your experience as realistic as possible.
Besides, you can improve your decision-making skills by observing and analyzing the uptrend, downtrend, and sideways of stocks with the help of these games. Not to mention, you’ll also learn how to come up with alternative solutions to the problems.
According to a recent report, in the year 2020, more than 779 billion transactions took place worldwide, bringing a surge in digital wallets by 83%. It is also estimated that by 2022, cash payments would be one of the least common payment methods.
As outlined earlier, with the help of technology, people can make hassle-free payments in no time. Today, you can go for contactless payments with the help of your digital wallets.
Keeping in mind the 2020 data, mobile payments are one of the biggest trends in the Fintech industry. The shift was hugely seen during the Covid-19 pandemic when more and more people opted for online transactions.
But according to the industry experts, there’s more to it. You’ll be surprised to know that mobile payments can cover not just the online stores. Yes, that’s right. Recent reports project in-store transactions to touch 2.7 billion by the end of 2022. This is something that will escalate the global e-commerce transaction to over $5.4 trillion by 2025.
Fun fact: Gen Z is practically the first generation to witness the onset of cashless transactions.
China Is All Set To Dominate The Fintech World
Although fintech collaborators, investors, and users are everywhere on the planet, one country would always dominate the fintech conversation, and that’s China.
It wouldn’t be wrong to call China the fintech capital of the world. According to a recent survey, more than 83% of Chinese consumers are making mobile or digital payments.
In fact, around 58% of the Chinese population is saving money and investing via fintech platforms. Not only this, but 46% of the consumers consider using fintech platforms to borrow money.
You’ll be surprised to know that the Chinese eCommerce market is valued at $1.9 trillion and is expected to grow substantially.
After combining the facts and data, it is evident that China has and will continue to emerge in the world of Fintech.
The fintech industry promises tremendous growth and benefits not only to nations but also to individual consumers.
It is also expected that the fintech industry will be able to provide better and efficient services that will cater to individual needs in the upcoming years. And this will definitely drive the next wave of fintech growth in 2022.
Hopefully, the article was informative enough to help you learn more about the fintech industry. And by taking into consideration the predictions mentioned above, it would be safe to say that the fintech industry is booming and is projected to see exponential growth in the future.
Sagar Sridhar is a personal finance blogger from Canada. His genuine passion for personal finance coupled with his unique style of writing is what stands out. Professionally, he is a computer engineer, agile certified and has a master’s degree in Project Management. His writing has been featured or quoted in the leading Canadian publications such as Credit Canada and many other personal finance publications. While he is juggling between his day job and blogging, he is the main author on this blog and has miles to go before making the final pit stop.