Banking and Fintech Technologies: Top Innovations to Focus

Fintech Leadership: Why is Fintech Shaping the Future of Banking?

Fintech’s meaning in banking refers to the intersection of finance and technology that is meant to improve financial services and create innovative products. With the help of big data, cloud computing, blockchain and mobile banking, fintech companies aim to produce robust, effective and convenient ways of managing finances.

Fintech is transforming the banking sector by offering solutions that challenge traditional business models. Neobanks, like Revolut, Chime and Monobank, provide online banking services that many consider more easily accessible. People can instantly meet their needs by creating accounts, making transactions and opening deposits using their mobile device.

To understand how fintech is shaping the future of banking, we need to look at the benefits of fintech companies over traditional banks.

Streamlined financial transactions

Fintech has opened more possibilities for customers with online payments, transactions and other financial operations. Nowadays, they don’t need a couple of credit cards or cash to pay for things — only a mobile device and a connection to the internet. That makes financial services more accessible and favorable.

Enhanced customer care

Every customer wants to feel important and respected while communicating with the firm. Understanding it, fintech companies provide personalized approaches towards each customer. Thanks to data analytics, they gather information about customers’ preferences, typical behavior and service expectations. Moreover, people can access financial services anytime, reach out to customer support and get all the information they need.

Constant innovations

The fintech industry is never static due to frequent regulatory changes, new technology advancements and fierce competition. Companies must produce better products to satisfy their customers’ varying needs. That’s how exciting services like P2P lending, biometric authentication and robo-advisors appeared.

Discover the latest fintech trends in the USA

What is Fintech in Banking? Key Areas of Use

Fintech influences the banking sector, making it adopt efficient tools to enhance customer experience. For instance, mobile apps, chatbots and online payment services allow people to access financial services securely and effectively. Therefore, technology in finance has quickly turned from a privilege and excitement to a necessary state of things.

The truth is that either independent fintech companies will end banks or the majority of banks will deepen partnerships with fintech businesses and software development companies. Fintech is reshaping banking, drastically improving consumers’ satisfaction and experience, process automation, frauds and threats detection, etc.

So why do banks have to develop efficient strategies and invest in the future of banking technology? Here are some of the reasons:

• To provide services at a more secure, fast, and high-quality level
• To increase customers’ trust, offering advisory services to leverage their financial literacy and spend money more wisely

With the increasing number of strong and innovative fintech companies, competition for clients becomes more severe. Yet, banks can cooperate with fintech companies to develop market needed products for their own benefit. Some banks have already chosen such a path of development.

Solutions for the future of fintech which they upgrade together with the fintech sector are:

• Churn prediction
• Query routing
• Personal finance management
• Biometric authentication
• Behavioral biometrics
• Sentiment analysis
• Robo assistants
• Conversational AI
• Natural language generation
• Location intelligence

Get to know what are the payment gateway providers in the USA!

Analysis with AI Helps Fintech to Win

So how does fintech change banking? Predictive analytics, clustering, and image processing allow banks to know whether there is a need to open a branch in this specific location and what the revenue would be in a 3-year-period. AI and ML innovations can help group clients by certain characteristic and behavioral factors which allows finance institutes to launch successful marketing campaigns. Examples of successful cooperation:

• Plink is an AI platform developed by Bancolombia to sell location intelligence to merchants
• Esri location intelligence software is used by SNL Financial to present to clients

Read interesting information about big data in financial services!

Personal Finance Management Software Demand Rising

Fintech is the future of banking services that lies in smart solutions and functions which help people save and manage their money effectively. PFM facilitates banks’ active role in people’s financial well-being. Banks started to give advisory financial services in real-time and remotely.

“Your grocery spending will increase by 30$ next month” – is a prediction people will definitely find helpful. And if they know the reason for the increase, they might feel more attached to their bank showing trust. Banks could tell clients what they should do to maintain their money balance at necessary levels. Transaction data if analyzed can be used for auto-save advice. Therefore, your bank will move 30$ into savings, based on your expenses data.

To provide such information to clients, banks need to know what datasets to analyze and how to extract insights that would bring real value. A great example of a successful PFM app is Mint. It connects to your bank accounts to track your spending and provide personalized recommendations for saving and budgeting.

Make sure you picked up on the latest trends in mobile banking!

Voice-Recognition – New Future of Fintech?

Voice recognition technology brings notable changes to both the banking and fintech industries. In-depth AI algorithms are capable of interpreting human speech. With the help of customized voice commands, people can log in to their banking applications, check accounts, make transactions, etc.

Now, all you have to do is say “What is my balance?”, and the application will immediately give you the precise answer. And just like that digital banking provides you with more convenient and streamlined access to financial services than traditional banks.

Security is better with AI

Banks are paying enormous non-compliance fees. Finding fraudulent activity is not an easy task and very often banks lose to tricky fraudsters. Yet, AI can help detect suspicious activities and find identities that conduct data breaches:

• Anti-money laundering (AML) software complies with laws, and regulations and meets requirements to prevent money laundering activities. It’s a great help for accountants in financial institutions and other industries’ legal entities.
• Know your customer (KYC) software verifies identities and prevents frauds in business relationships, during transactions, etc.

AI can upgrade AML and KYC software to the next level and ensure detecting fraudulent activities much faster. Moreover, you can use AI in:

• Transaction monitoring
  AI detects non-obvious connections during connections
• Entity resolution
  ML-based name matching system works to create a unified view of each user across different databases
• Ultimate beneficial owner
  Analysis of government documents to receive stakeholder information and identify real owners
• Media monitoring
  Sort crime news by types, identify the best relevant matches

Get the best personalization in banking services for your fintech business!

Digital Banks & Cash-Free Payments

Fintech has a huge impact on the banking sector. Think of bitcoins, digital accounts, controlling balance on the go, no paper bureaucracy or the need to carry cash and credit cards. Isn’t that a real on-going financial revolution?

People tend to have more accounts at different banks as they are becoming more informed about having rates on financial products and services. Digital banks recognize excessive spending and recommend when to deposit and when to pay off loans.

Fintech in banking encourages people to embrace online banking – use contactless payments, remotely open and manage accounts, and pay fewer visits to physical branches. Hence, data scientists, software engineers, and ML specialists tend to focus not on mere development but on creating and realizing the ideas. And fintech is full of ideas to investigate and implement – take only automation:

• The role of agents will go to chatbots
• Self-driving cars: will automation mark the end of auto insurance?
• The insurance process with AI-powered virtual assistants that’ll help with renewals of expiring policies, bill payments, and advice on investment

Cryptocurrency and Blockchain Technology

People have become millionaires with Bitcoin which is a merit of fintech. Cryptocurrency is an inevitable part of modern fintech and banking industries. Still, since it’s a relatively new class of digital assets, they have to continue exploring its potential to enhance financial services.

Discover more about mobile banking technology trends

Cryptocurrencies use blockchain technology — an open-source project released in 2009. It works like an email: you share your address, so that people can make a transaction on a peer-to-peer network. Blockchain in fintech industry efficiently accelerates money transfers, payments, and investments. With data decoded, blockchain technology protects from fraudulent activities and breaches.

Personalized and Faster Banking

Peer-to-peer payment is like messaging, only apart from words you also send money. For example, Venmo is a mobile payment app that allows users to send and receive money, send birthday presents and just chat with their family members and friends.

Fintech’s necessity notably increases with the urgent need of contextual banking. Companies must eliminate distracting and ineffective manual work and finally adapt process automation. This way, they’ll save time and resources, yet improve efficiency by delivering unique and efficient customer service.

Cloud computing allows banks to swiftly and conveniently access data. Therefore, signing paper documents, waiting for approvals from third parties and solving verification issues for days or weeks are in the long-forgotten past.

Where can you find the money transfer software developers? Read here!

Examples of AI in Banking

The Longevity AI Consortium at King’s College London is developing AI solutions that use live data and leverage pension funds and insurance policies. Longevity banking works on simplifying banking for people over 60 and providing the aged with better reliable and beneficial financial services. Positioning itself for the silver generation, Longevity Bank in the UK is going to launch a pilot product through which users could even track their daily activity and nutrition.

Previously segmented and separated solutions and services will be integra­ted into a synergetic blend of health, insurtech, preventive medicine, longevity, agetech and financial well-being.

– Sergey Balasanyan, co-founder and CEO of Longevity Bank, UK.

Gallup researched how money, the financial sector, and external conditions influence the well-being of people. During COVID-19 pandemic, the mental state of people deteriorated. Many feel anxiety and uncertainty from social distancing more than from their financial or physical well-being. Banks began to establish partnerships with healthcare institutions, conduct surveys, hire nurses and simply equip places with hand sanitizers.

Protecting people’s well-being and offering them helpful hand support is not only a manifestation of morality and empathy. Banks become closer to their employees and clients when their strategy includes care policies. According to Gallup research:

Thriving in well-being amplifies employee engagement, and engaged workers achieve better business outcomes.

Fintech products can also aim to care about people’s health and longevity. Imagine your healthy lifestyle brings you rewards from your bank. For instance, every time you spend money on fitness activities or eco-camping, your AI assistant sends you special offers. Who wouldn’t like that?

So What Fintech Experience Traditional Banks Should Implement Today to Compete?

Fintech companies are definitely leaders in promoting revolution in finance and adopting AI to voice payments technology, developing digital financial assistants, personalized banking, and security. Implementation of fintech results in lower costs, increased efficiency, and enhanced customer experiences. Therefore, the impact of fintech on banks’ future is hard to overstate — it depends on how open banks are to innovations.

Specifically prioritizing customers’ needs, fintech companies send the traditional banks in a knockout. To stay relevant and competitive, traditional banks must accept digital transformation, customer orientation and cutting-edge fintech solutions. The choice of what to adopt is up to them: some might be lucky with blockchain technology, and some – with personal finance management software. The most important is to provide effective and high-quality services.

Consider Inoxoft Custom Banking Software Development Services

Inoxoft is an international software development company that provides fintech development services. We help businesses resolve automation challenges, leverage trading success, and digitize banking services:

• Custom banking software development services with advanced web and e-banking solutions
• Trading software development services to build automated trading systems

The domain expertise of our teams allows us to present digital opportunities and help you become recognizable in the fintech industry. We provide cash flow management tools, online banking, automated trading platforms, accounting software, loan/borrow debt management software and other on-demand banking and trading software.

In one of our projects, the client wanted to create an automated trading system for quick and profitable solutions and effective communication with brokers. We delivered a software web application that automatically creates sheets with optimized exchange rate information and enlists all generated orders for profitable purchases according to a defined financial strategy.

Are you ready for the future of fintech? If you want to be at the forefront of changes and incorporate new financial services and innovations, we’ll help you develop and create solutions that will suit your needs, business, and ideas. Contact us to talk!