Fintech Application Development – 5 Latest Trends Banks Must Pay Attention to Enrich Popularit

When you ask a millennial when they have opted for cash payment, they will be clueless. They have turned their attention more towards the online mode of payment or you can say cashless payment or digital banking solution. Do you know why? It is because the latest research has revealed that half of the people belonging to different age-groups are regular users of digital wallets, debit and credit cards. What’s more, a recent study has suggested that by 2021, cashless payments will surpass cash at all points of sales. What does this indicate? It points towards a marketing world completely dominated by a cashless society. But be at your foot as one more technology has been disrupting the online industry and have brought significant changes in the lives of millennials in recent years. It is- mobile apps. Yeah, that’s true! As per the experts, the mobile app industry is growing at a faster pace and has forecast that it will generate 935.2 billion US$ by 2023. So, no sign of slowing down in the future also! Such is the power of mobile apps that it is predicted that digital wallets, as well as credit cards, will become obsolete in the next few years and the whole of the business will be dominated by mobile apps. These apps have become powerful enough that even banking and other FinTech industries have started to take them seriously and have grabbed this opportunity with their both hands to further enhance their brand value precisely. Nevertheless, the fruits of digital transformation will not yield good results overnight. It is a complex and time-consuming process that will require “one great idea” to add value to a successful banking solution. And this great idea comes with the incorporation of the latest technological advancements and new inventions into the business fold. That’s it! The year 2019 was great in terms of tech progress ranging from AI to IoT and is going to remodel the mobile app development in 2020 as well. Besides, the rise of the smartphone has given banking sectors a great prospect to boost the visibility of their financial products and reap benefits from it. Henceforth, it is well said- “Future of Mobile Banking starts from now.” Let’s check out some of the newest technological trends which have the potential to create a well-suited space for fintech app development among tech-loving millennials not only in 2020 but also in the future.

Trend #1: Voice Recognition will be the New Norm in Mobile Banking

There has been ongoing excitement with the success of voice assistant technologies such as Alexa and Siri and have created the latest trend which has found new admirer among the banking industry: voice payment. An extension of AI technology, its future looks promising because, at present, more than 18 million US users have opted for voice payment at least once and are likely to increase 4 times in upcoming years. However, what future holds for voice payment in the FinTech industry? It has great potential as it comes with two-way authentication to secure mobile apps for customers. Not only it eliminates the need for banking staff, it also gives complete control to them in searching for financial services in a well-protected manner via their smartphones. Various private banking institutions have partnered with Siri/Alexa to allow their customers for bill payments, money transfers with a trusted source, report stolen cards or banking fraudulence and inquire about transactions all using voice only. The most common use-case of voice banking is checking transaction history, account balance, and other details. Furthermore, the integration of Fintech application with Google Assistant has also made a mobile payment more secure and successful for users. Therefore, considering voice recognition as a revolution for banks (or FinTech) apps is an insult to it, it is much more than that. It is a trend-setting roadmap in the FinTech industry in the year 2020 which works on the concept- ‘banking-on-the-go’ to make online transactions for the customers (especially millennials) safer and easier.

Trend #2: Cardless Transaction (or Withdrawal) is the Future of ATM

There were times when people forget their wallets in a rush and regret their foolishness as they have to stand in a queue at ATM for cash withdrawal, but this is not the case now. It is because the banks have introduced an innovative feature called Cardless ATM which has made the use of wallets outdated. Although not a new trend, but increased adoption by banks have swelled its popularity to a great extent. It has given a valuable option to the banks for improving their customer services by enabling them to get cash by just using a mobile banking app. Depending on the bank and which financial provider (like Apple Pay or Google Pay) has collaborated, customers can withdraw money using two ways; app-generated code and near-field communication (NFC). The first method uses the transaction of the QR code displayed on the banking app. The second method called NFC is contactless ‘tap & pin’ card transaction where the ATM sensor present in the phone is tapped to extract money with no involvement of card.Cardless ATM withdrawal has attracted a large number of customers into the fold of banks because of its high speed and great convenience with the beneficiary no need to have any bank account. Besides, they are known as future of ATM since it makes all transaction encryption-coated to not only make the assets of the customers safe but also reduce cloned card frauds which happen after the ATM card has tampered, a common norm today.

Trend #3: Big Data has come to Rescue Customers by Detecting Frauds with Great Efficacy

The significant growth of revenue among FinTech institutions comes at a high risk of bank fraud. The problem is so severe that it is expected that by 2020, fraud-related issues incurred on debit, credit and pre-paid cards could exceed $12 billion. Thus, fraud detection is the top-most priority in mobile banking when the additional cost of banking frauds such as phishing, identity theft, and account takeover is also taken into consideration. Henceforth, banking experts have predicted that more banks and other financial institutions are going to leverage big data to detect the fatal flaws which are posing a great threat to mobile banking in upcoming years. With the given technology, banks can get access to the vast pool of information from customers’ data through resources such as purchasing history of customers to evaluate their common pattern and develop a holistic view of each customer and thus detect irregularities associated with it.Big data is the newest form of fraud analytic technique that successfully identifies the hidden pattern of customers, integrates data from multiple resources into a model and thus avoids the customers to fall into the trap created by online intruders.

Trend #4: Blockchain Technology is Ready to Capture the Imagination of Mobile Banking Lovers

Blockchain, initially known as “public ledger”, is a powerful technology that uses virtual currencies for daily transactions and has a database that is cryptographically secured. It has great potential to solve various problems associated with financial institutions and that’s the reason why 9 out of 10 FinTech sectors are showing interest in this technology. According to research, the global blockchain market for the bank and financial industry is projected to worth US$ 4.65 billion in 2022. Banks are keen to implement this technology to reduce transaction and processing cost and thus saves billions in cash. Let’s look at how blockchain technology is going to be a craze for a robust FinTech app development due to the following reasons:

I. Fraud Reductions

Most banking systems are built on a centralized database which has made them more prone to a cyberattack with 45% of the financial intermediaries such as money transfer and stock exchange services are the worst sufferers. With blockchain at the helm, FinTech institutions will get rid of cyber-attackers to get full access to their systems and steal key information.

II. Cross-Border Transactions

In the last decade, there has been significant improvement in direct money transfers and interbank settlements, still there remain some gaps due to lack of global standards. Adopting blockchain technology will not only help in creating a competitive marketplace but also slash the remittance rate from 5-20% to 2-3% to the delight of banks involved in foreign exchange and fund transfer services in multiple currencies.

III. Improving Know your Customer (KYC) Services

A survey has stated that an estimated $60 million to $500 million per year is spent by financial institutions on keeping KYC update to reduce money laundering and terrorist activities albeit at a high cost. With blockchain, verification details of clients can be accessed by other organizations and avoid repetition of the KYC process and thus reduced administrative costs.

IV. Trade Finance

The financial institutions can completely transform their work by embracing blockchain technology. It is because it can equip banks with a real-time documentation review with automated payments to reduce duplication of bills and provide transparency via smart contracts and thus transmit a smooth operation for the customers.

V. Payments

A highly transformative process, this technology will permit banks with higher security features with lower costs and also help them to get rid of intermediaries from the payment processing system.Thus, the year 2020 is going to be great for the banking industry due to the resounding impact posed to them from blockchain technology significantly.

Trend #5: Great Expansion of Mobile Banking Services via Open Banking

In the future, the growth of banking and other FinTech institutions will depend on how well they share user data with 3rd party providers using open application programming interfaces (API). If they leverage the given concept for their benefit, they can build a single platform from where the customers can access a network of financial services successfully.One question arises- “How it works in real life?” It can be explained by the fact that each person has multiple banking accounts. Consider one bank offering personal loans at low interest, others offering appealing saving schemes, and another proves free debit cards. Open banks create a centralized hub where the customers get a single dashboard to manage all services simultaneously without log-in into each bank’s account.In 2020, it will be the main tool for financial transactions for managing multiple payment methods and providing a more transparent view of finance in the most effective manner.

Wrapping Up

Previously, the banking industry was notorious for fiercely resisting changes in their working. But time has changed and with the arrival of mobile banking, innovations are constantly unfolding the banking sector. Various technologies have arrived on the scene which has acted as a bridge in maintaining cordial relationships with banks and customers. To remain successful, FinTech industries are creating a good space for mobile banking apps to have great appeal to the millennials. In 2020, if these trends are keenly followed by banking institutes; consumers can assure themselves with personalized and effortless end-to-end banking experience at their doorstep.

#Fintechappdevelopmentcompanies #Fintechappdevelopmentcompany #Fintechapplicationdevelopment #Fintechsoftwaresolution