5 Key Trends In The Fintech Industry

Fintech is a rapidly growing industry. It offers both, new solutions to customers and technology for financial institutions. What exactly is fintech? What are the key trends in this industry? Find answers to these and other questions in this paper.

What is fintech?

Fintech is an acronym derived from the English phrase financial technology, which refers to companies that develop digital solutions related to the money circulation. Their main feature is innovation as well as the absence of stationary branches serving customers, since fintechs operate online and offer digital solutions. What else is characteristic of fintech companies? First of all, the fact that most such entities adopt a specific business model based on the provision of one specific service. As a result, fintechs successfully operate in the field of mobile payments, online currency exchange or crowdfunding.

An important and worth of mentioning issue, when characterizing fintech companies, is flexible forms of communication with customers, or a perfectly developed User Experience (customer experience) strategy. As a result, fintechs have become real competition for banks, which is due to the fact that they offer solutions tailored to customers’ needs and they are able to modify their offer flexibly in order to match the current market situation. It is mobility, creativity and dynamism that are the main assets of fintechs, which are increasingly growing on the financial market.

What does the Polish fintech industry look like?

One should be aware that Poland is a local leader in fintech solutions, which is due to the fact that our country is home to the largest number of fintechs in Central and Eastern Europe. Currently, there are more than 300 of them and some of them have achieved international success and, consequently, are highly recognized all over the world. It is also worth noting that the Polish fintech industry has been growing dynamically, as evidenced by the fact that most Polish fintechs were established in the last 3-5 years. What characterizes them? First of all – diversity. Both in terms of the services offered and the operating model as they are start-ups and enterprises that have grown really extensively. At this point it is worth noting that these companies offer services for individual or business customers, but they also provide technologies to banks and other financial institutions. What’s more, new trends are emerging in the market all the time, determining the development of the industry.

5 key trends in the fintech industry

As already mentioned, the fintech industry has been growing rapidly and new solutions have been systematically implemented and offered to customers. What are the current trends in the industry? Here are 5 key ones that are sure to influence the future of the finance sector.

Consultants – robots

Fintech companies make efforts to optimize their operating costs. As a result, they use virtual assistants or advisors – bots that are able to guarantee the highest quality of service and a feeling that a user talks to a human. This is possible due to artificial intelligence as well as machine learning. Big data (processing huge amounts of data) is also proving useful, bots are able to predict future customer behavior and interact with them.

Technology

Providing technology to financial institutions belonging to the banking sector is also an important trend in the fintech industry. Both parties benefit from this as fintechs can implement and develop cutting-edge solutions, and large institutions can implement them into their systems using APIs. As a result, the offer expands to include innovative services, a trend confirmed by experts of X Open Hub, a fintech that provides technology to more than 100 companies in 30 countries around the world.

Fintech solutions in the B2B model have also gained popularity in recent years. Why? B2B start-ups significantly accelerate development of financial architectures of larger enterprises, frequently enabling combining innovative services with existing IT structures in an efficient and secure way due to the APIs. Comment by Sylwester Jezierski, Marketing Manager in X Open Hub

Embedded banking

One of the most significant trends in the fintech industry at the moment is embedded banking, which is solution meaning additional banking or insurance services and products offered by companies whose core business is based on something completely different. As a result, they can gain a new source of income, as well as promote customer loyalty to a particular brand. As a rule, these companies work precisely with Fintechs, which create specific solutions for them and support them on the way of offering such services to customers.

Automation of processes

Fintechs are also working to automate business processes in the financial industry, examples of which include payment monitoring, pre-approval of loan applications or many other repetitive processes. This translates into lower business costs and improved organizational efficiency. It is also worth noting that process automation is now a necessity to remain competitive.

Voice payments

Implementation and development of voice assistants is also proving its worth in the financial industry. Using a smartphone and voice-controlled services a customer can make payments and check his/her account balance or make traditional wire transfers. At this point it is worth noting that this is not only a convenient solution, but also a great convenience for blind people, who thus are no longer socially excluded.

In conclusion, it should be said that the most popular current trends in the fintech industry will certainly stay with us for a long time. This is due to the fact that they are solutions that allow not only developing financial services, but also can pose basis for cooperation between Fintechs and the banking sector.

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