The next decade marks an incredibly important time for the digital payment industry. We are looking at not just remodelling of the current digital payment system but also a massive wave of advanced digitization and a heightened focus on digital payment experience. Online payment systems, cryptocurrency, improved fraud prevention, and more will be the prime focus in the next decade. A revolutionary global effect has been made by mobile apps like Pay2Go and PayPal on the way to make mobile payments. Banks, financial institutions, fintech enterprises have been benefitting from open APIs and fintech megatrends and applications while fintech has transformed the financial services industry immensely. Here are the most crucial five digital payment trends that are set to revolutionize the industry even further.

In the wake of a fast-moving world that’s increasingly looking to add as much convenience and ease to their lives, people are looking to do more in one single go. This need to do more is where bundled financial services will come into play. We will soon be using mobile payment apps with a single interface for multiple cards and bank accounts. Users can easily switch from one bank account to the other using a single tap.

Users will be able to view aggregated information and easily switch between one account to the other seamlessly. Such bundled services add additional value to the user’s experience of digital payments and help them pay as they go. Users won’t have to log into multiple online payment gateways to get the job done.

How Bitcoin transactions work is no secret to the world anymore. This decentralized platform of digital payment was adopted and rejected alike. However, cryptocurrency has continued to become a rising point of interest in the digital payment industry since it is not and cannot be regulated by a central financial institution.</p.

With Bitcoin becoming more energy-efficient and fast, it is expected to gain more widespread adoption in mainstream digital mobile payment methods. The adoption of cryptocurrency is already picking up speed in the countries where Bitcoin is accepted. Moreover, it’s not just Bitcoin but also other cryptocurrencies that are expected to serve as great digital wallets shortly. They offer higher security (two-factor authentication) than credit cards and are also decentralized. Thus, traditional financial institutions won’t be able to restrict its price movements.

Plus, they also won’t have any control over transaction or processing fees when making payments via cryptocurrencies, thus eliminating these extra charges. Soon, this innovatively creative online payment system will witness a boost in its performance and usage.

New innovations in fintech have enabled businesses and fintech startups to serve customers in novel ways. Banks, financial institutions, fintech startups and businesses have utilized fintech namely Artificial Intelligence (AI) predictive analytics, blockchain, cryptocurrency, mobile payment and social data analytics to provide superior customer experiences (CX).

As customers are businesses’ primary source of profits, market value, and growth, they need to be handled with. Before delivering the wants of the customers, businesses need to identify their deep-rooted desires and needs. In accordance with a Gartner study, 89% of global companies are expected to compete primarily on customer experiences and business leaders are becoming more proactive in finding new ways to enhance the customer journey. The widespread applications of Fintech are redefining the way businesses connect with their customers.

AI predictive analytics enhance customer experiences

Fintech is the driving force behind innovation and impacts every aspect of a company’s operations, including its ability to influence and enhance customer experiences. By 2025, as many as 95% of all customer interactions will be through channels supported by artificial intelligence (AI) technology.

Using customer data for analysis based on Artificial Intelligence and machine learning helps predict customers’ needs and real-time product feedback. Take the algorithms of services like Netflix and Spotify as examples, customers’ actions, such as watching a certain show or skipping certain songs, impact the next recommendations they will receive. Things change quickly based on customer feedback and preferences so businesses can capture what customers want at the exact moment. Also, Artificial Intelligence and machine learning can be deployed to provide intelligent, personal and informed customer experiences at any touchpoint along the customer journey.

Meanwhile, Artificial Intelligence technology helps transform customer service by making it automated and fast. AI-powered conversation agents and chatbots are used in diverse customer engagement scenarios as they are curated to simulate human interactions and offer real-time responses around the clock.

Blockchain technology creates novel business models and reshapes customer experiences

Blockchain technology has fascinating applications to proceed to the formation of contracts and lower transaction costs to reshape customer experiences. Smart contracts are a way for machines to enforce and execute contract terms and make payments without human involvement. A study by Santander has revealed that the Blockchain will slash infrastructure costs for customers to make payments and proceed securities trading as well as regulatory compliance by $15–20 billion a year by 2022.

The application of decentralized public ledger in blockchain technology allows for the emergence of entirely new product offerings and novel business models such as crowd-lending, as well as peer-to-peer (P2P) banking and insurance. Also, fintech start-ups have utilized blockchain technology for faster, safer and more transparent transactions and lower costs for customers in transactions.

Cryptocurrency lowers transaction costs for customers

Cryptocurrency like Bitcoin is a digital or virtual currency designed to work as a medium of exchange in blockchain technology. It uses cryptography to secure and verify transactions and it is limited entries in a database that no one can change.

The transaction costs of cryptocurrencies are low and making payments with cryptos can proceed worldwide. Cryptocurrencies can be stored in a digital wallet that customers can manage from a smartphone or they can store cryptos in digital wallets.

Meanwhile, digital and mobile payment are growing their market shares. It is a sign that consumers are ready to adopt these fintech technologies for daily use. Even though peer-to-peer payment companies initially only targeted younger consumers, it seems that more people have also started to use the technology for daily transactions, thereby removing the middlemen and bringing down transaction costs.

Businesses connect with customers with superior data analytics

The best way for businesses and fintech startups to boost customer experiences is to connect with them emotionally. With data analytics on customers’ preferences and behaviour, businesses are empowered to use these insights to create exceptional customer’s journeys. Marketers can utilize data to understand relevant customer needs that they can touch.

Businesses can also leverage social media data for enhancing deeper customer engagement/ segmentation and driving personalized sales outreach and lead nurturing. Businesses can leverage tactics from monitoring different social channels for posts to sophisticated sentiment analysis tools to analyze what a customer is thinking.

In conclusion, fintech is a game-changer for customer experience in almost all sector. New innovations in fintech have empowered businesses and fintech startups to offer superior customer experiences in novel ways. Businesses are willing to embrace creativity offered by fintech and go beyond the norm to stand out from competitors with richer customer experiences.

In a competitive market place, customer experience and satisfaction are always important to drive business growth. Those businesses which keep abreast of fintech megatrends and embrace innovative solutions can enjoy sustained customer loyalty.

 

Drop us a line at info@ndngroup.com to learn more about how our innovating technologies thrive your business in the era of fintech.

Fintech has evolved considerably and changed rapidly in recent few years, impacting diverse industries of trading, banking, insurance, financial investment, wealth and asset management. Banks, financial institutions and businesses have proactively engaged with fintech applications. In the next few years, the rise of Contactless Payments, On-demand Insurance, Algorithm Trading, Robo Advising and Open Banking are major megatrends being unleashed in the era of Fintech.

Banks and fintech startups have utilized technologies like Blockchain, Data Analytics, Machine Learning and Artificial Intelligence (AI) to help speed up and automate transactions as well as reduce operational costs.

For instance, the deployment of Blockchain, a form of decentralized distributed ledger technology, provides a secure and efficient platform for storing and maintaining transactional data records. Once stored on the blockchain platform and verified through Smart Contracts, the transactions become immutable. As such. banks and fintech enterprises can safeguard customers’ data security and create efficiency from business operations.

Nowadays, businesses have become more customer-centric to stand their ground. It never has been more important to understand what target customers really want and know customers’ value.

Contactless payments are synonymous with cashless payments that do not require contact between the devices used in consumer payment and POS terminals by the merchant. Contactless payment systems are based on RFID (Radio Frequency Identification) and NFC (Near Field Communication) technologies.

According to a recent Global Market Insights report, the increasing number of cashless transactions in emerging economies positively impact growth in the smart card market. The smart cards include a small microchip that processes and stores electronic data while securing data, assets, and identity. The global smart card market is expected to reach US$65 billion by 2025 with banking representing about 25%.

The NFC technology within contactless readers can interact with phones and connected mobile devices such as watches or rings. The contactless payment allows customers to simply wave their smartphone across the reader to complete transactions swiftly. Contactless payments are faster and more secure than the PIN technology as it transfers the encrypted data to the point-of-sale device instantaneously.
Currently, payments are enabled via secure contactless and mobile payment systems such as Samsung Pay, Apple Pay, Google Pay, Fitbit Pay, or any bank mobile application that supports contactless.

Contactless payments are faster than cash and card transactions. Businesses have been focusing on offering superior customer experience and contactless payments will help achieve that. Customers show greater loyalty toward businesses which have embraced contactless payment technology.

Insurtech startups have embraced fintech innovations to impact the insurance industry. With Data Analytics and Artificial Intelligence (AI) applications, Insurtechs has leveraged data-driven insights to curate on-demand protection coverage that is customized and flexible for customers.

According to the recent World Insurance Report, 41% of customers said they are willing to purchase usage-based insurance and 37% explore on-demand insurance coverage. The report also showed 37% of customers are willing to share personal data in exchange for personalized coverage and better protection.

For instance, wearable devices and smartphone apps are increasingly popular with consumers and insurers, especially in healthcare and wellness space. Some devices can count the calories burnt during a workout and monitor customers’ heart rate and blood pressure. Insurtechs and startups have invested in developing the devices and wellness/health apps that allow customers to monitor their health. As such, customers can use the data to improve their health and fitness levels while insurtech can utilize the data to find out customers’ habits, preferences and offer customized insurance coverage.

With blockchain technology, insurtech startups have introduced simpler purchase processes and end-to-end automated claim management, thereby streamlining operations securing customers’ data privacy and making a purchase/ digital payment process user friendly.

With an agile operating model and digital innovations, insurtechs target potential profit pools and capture share among target customer segments. It is widely expected insurtech startups will increase the overall growth levels of the insurance industry and gain big market share.

Algorithmic trading is amongst the most talked about financial technologies in recent years. It has given trading firms more power in the rapidly evolving markets by eliminating human errors and changing the way financial markets operate.

Algorithmic trading can be applied in many forms of investment and trading activities such as commodity and foreign exchange trading by brokerage firms and investment banks.

Algorithmic trading uses computer programs to trade at high speeds and volume based on criteria, such as prices and specific market conditions. Devoid of human emotions, latency, technology-oriented, algorithmic trading executes trading commands accurately and instantly.

Algorithmic trading automates the trading process, ensuring that orders are executed at what are deemed to be optimal buying or selling conditions. The algorithms have the capability to analyze a variety of parameters and technical indicators in a second and execute the trade immediately. The increased speed on trading becomes important as the price movements can be captured by traders as soon as they occur.

Unlike traditional human-to-human financial advice, robo-advisors provide personalized and automated financial advice to customers based on algorithms.

Robo-advisors collects information from clients about their financial situation and future goals and then uses the data to offer advice and automatically invest client assets. Robo-advisors offer easy account setup, financial planning, portfolio management, and data security features, exceptional customer experiences and low fees. The main advantage of robo-advisors is that they are low-cost alternatives to traditional financial advisors.

Also, robo-advisors are available 24/7 and it takes significantly less capital to get started. In contrast, human financial advisors prefer high-net-worth individuals who need a variety of wealth management services and can afford to pay for them.

The future of robo-advising is bright. Robo-advising will be a tool used by nearly everyone, from financial advisors in wealth management firms to the average at-home retail investor.

Open Banking is a system that provides a user with a network of financial institutions’ data through the usage of application programming interfaces (APIs). With Open Banking APIs, banking data are available in real-time, providing consumers with better ways to conduct transactions and make investments.

Open Banking gives the benefit of choice to customers as they can select from multiple financial service providers available. It also empowers customers to take charge of their finances and manage their bank accounts.

Open banking APIs also enable service personalization to benefit customers immensely. Customers can now have access to multiple accounts in one place and enjoy the best deals available. It puts the power back into the hands of customers, enabling them to securely use third-party financial products and services that rely on banking data.

Meanwhile, Open Banking offers an excellent opportunity to fintech startups to meet the customers’ needs for new and better services such as personal finance management and access to credit services through a single application.

In conclusion, fintech has been used to automate insurance, banking services, financial investment, trading and wealth management. Fintech usage has risen significantly with an increasing number of players adopting innovative technologies to offer best-ever products and services to customers. The development of Contactless Payments, On-demand Insurance, Algorithm Trading, Robo Advising and Open Banking are the hottest trends in the era of Fintech.

Drop us a line at info@ndngroup.com to learn more about how our innovating technologies help expand your business in the era of fintech.

Financial technology, or FinTech for short, is one of the most exciting and fastest-growing areas in global business today. Fintech is beginning to disrupt the financial world. The financial industry is now more focused than ever on technological innovation than at any other time.

Blockchain, Artificial Intelligence (AI) and Machine Learning are some of the most used technologies in FinTech, offering the potential to play a bigger role to support banks, financial institutions, fintech startups, ventures and enterprises.

FinTech has shifted towards consumer-oriented services and various sectors such as retail, insurance, education, fundraising and many more. Fintech gives birth to Digital Wallets, Peer-to-Peer (P2P) lending, Crowdfunding, Mobile Banking and Biometric Recognition.

Nowadays, customers desire a fast, easy-to-use and seamless payment experience. Digital payment allows users to pay for purchases worry-free with no hassle.

With digital wallets, users can make a mobile payment, proceed transactions and money transfer between bank accounts. Users can also store the details of their credit or debit cards in the wallets and make payments in retail shops and restaurants safely. They can even make onsite merchant payments and pay bills smoothly and securely. Some digital wallets enable users to store money in the form of cryptocurrencies.

Meanwhile, consumers can receive special offers, rewards, and discounts through their digital wallets and use reward points at checkout. Many consumers are in favour of a digital wallet that integrates loyalty programs that can be used at multiple merchants. As customers’ data are encrypted in digital wallets, their personal data storage is highly secure even though they lose their mobile phones.

Mobile banking is a means for customers to monitor banking accounts and make transactions from their smartphones in the Fintech. Banks, financial institutions or fintech companies let their customers utilize mobile apps and so they can check deposits, account balance and more from smartphones.

Customers can transfer funds from their bank account to another account with a smartphone, from anywhere to everywhere. They can also pay bills, check account balance, statements, get alerts, study recent transactions, cancel ATM or credit cards.

Mobile banking enables customers to enjoy banking services close at hand, thereby taking care of financial chores and saving time. There is no need to go to a bank or ATM and wait for the bank to open to check account balance. Some mobile apps curated by banks enable customers to manage their fund investment and digital money in a bid to improve customers’ daily financial decisions.

The mobile banking appeals to customers with its speed, convenience and highly personalized real-time banking experiences. Customers can revel in personal banking services by tapping on the mobile banking apps and “middle-man” intervention are eliminated to speed up the transaction process.

An entrepreneur may think that they can only raise capital from investors, capitalists and banks outside of their own networks. Yet crowdfunding is a great way to allow entrepreneurs to raise funds from the community in exchange for their products and services and fund a venture.

To get started on the crowdfunding path to funding and exposure,  entrepreneurs need to contact the chosen crowdfunding platform that best suits their campaign missions, values, purposes and shares their ventures’ messages. Crowdfunding not only allows entrepreneurs to present a business and product, but also gives them the ability to share the message behind it. People who view the entrepreneur’s campaign and are dedicated to making financial contribution strongly believe in the success of the venture in the long run.

Crowdfunding is an excellent way for entrepreneurs to receive the financing and exposure they need in order to help their ventures grow and succeed.

FinTech has fostered the development of the innovative peer-to-peer (P2P) lending model. P2P lending is ideal for individuals who want to avoid the high-interest rates on traditional bank loans and have flexible terms and a fast and convenient application process.

Most P2P platforms have a waiting list of investors to provide loans to borrowers and when the platform is combined with an automated matching process, it means turnaround time on getting money can be very quick.

P2P lending platforms eliminate the “middleman” or intermediaries and directly connect borrowers with potential lenders. Borrowers can often access loans with interest rates lower than they could obtain from traditional lenders like banks. Because peer-to-peer loans are unsecured, there is no need to provide any collateral, so borrowers do not need to tie any personal property to the deal, as is the case with many other types of borrowing.

Also, lenders may earn returns which is higher than the income generated through banks’ savings and investment vehicles. Also, they have access to flexible terms that allows them to add and withdraw funds easily, provided that there are other lenders available to replace them in the loans they wish to withdraw from.

Safeguarding customers’ data security and privacy are the main concerns that need to be addressed with technological advancement. More banks, financial institutions and businesses are coming up to provide convenient biometric authentication processes to customers.

Biometric identification can be achieved on a mobile device via its built-in biometric sensors. High-end mobile devices have already embraced the facial recognition technology which is based upon measuring users’ faceprints to grant access to their accounts.

Also, more banks and businesses have already adopted Touch ID in their mobile banking apps. Biometrics such as thumbprints and facial recognition enables users’ biometric authentication and boost security to financial transactions.

In conclusion, Fintech is one of the most fastest-growing areas in global business. The launch of mobile banking can hugely reduce customer acquisition cost and operational costs as well as improve revenue for banks. Banks, financial institutions and ventures stand to benefit from the use of mobile wallets, digital payment, peer-to-peer lending and crowdfunding.

Explore more how NDN Group’s Fintech solutions can help your enterprises suit your customers’ needs and meet your business goals. Drop us a line at info@ndngroup.com to learn more about how our innovating technologies help expand your business.