Top Trends to Witness in the Fintech Sector In 2022

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Flentas Tech 22nd June 2022 - 6 mins read

The Fintech industry uses technologies to make financial services more accessible to the public, such as innovative banking, investing, and cryptocurrency applications. The Fintech industry consists of start-ups and established financial institutions trying to enhance financial services usage provided by existing financial companies. The Fintech industry has been instrumental in automating banking services, insurance, investments, and trading. Artificial Intelligence, blockchain, cloud computing, and Bigdata are considered the key pillars of the Fintech industry.

The year 2022 brings with it many opportunities and challenges. Recovering from a global pandemic, we have to adapt to the new standard way of lifestyle. The pandemic-induced lockdown forced many services to shut down temporarily. Work from home grew enormously in almost every sector. Many organizations adopted a digitized approach to take their businesses forward. Digital platforms saw tremendous growth as the world shifted to the online realm. The Fintech sector also saw drastic changes in this newly adopted way of work. According to some reports, the Fintech market value approximately doubled that of its previous years. It became almost imperative to digitize financial services and make them user-friendly for rapidly evolving users. Extensive innovations in payments and banking technology (B2B and B2C) redefined financial services. The development of the Fintech industry depends on the technologies underlying the financial services. Following are some of the tech trends in the Fintech sector in 2022.

Artificial intelligence and Machine learning

Processing large amounts of data and reaching valuable conclusions is done in machine learning apps by using its algorithms. Patterns are analyzed in real-time, enabling quick decisions. AI studies the typical behavior of the user in a banking app. AI notices any abhorrent behavior and alerts the client and the bank of the threat if a fraudster enters the platform. The Fintech sector will continue to be one of the leading sectors to be benefitted from AI and ML.

Blockchain

The modus operandi of Fintech is entirely transformed by the use of blockchain technology. Once stored in this system, data becomes very difficult to modulate. Hence it remains protected. Transactions can be done in a safer way using this technology. The philosophy of decentralized finance is a crucial aspect of blockchain.

Regulatory Technology (Reg-Tech)

Regulatory technology or Reg-Tech manages regulatory processes by technology in the financial industry. With Reg-Tech, companies are empowered with advanced software to simplify compliance processes. Reg-Tech, along with machine learning, offers data on money laundering activities, thus reducing the risk associated with it. The other significant functions of Reg-Tech are reporting monitoring and compliance.

Cloud banking

Cloud-based infrastructure makes banking processes more convenient and less prone to errors. Cloud banking perfectly suits seamless global payments, P2P transfers, and contactless payments. With cloud banking, banks can store enormous amounts of data with enhanced data security and improved operational speed.

Biometric authentication

Biometric authentication is more secure than regular passwords and pins. Users consider biometric authentication the best form of identity verification and dislike using multiple passwords as they don't have to remember different combinations of passwords and keep changing them. With biometric authentication, your confidential information remains safe even when your phone or laptop is stolen.

Robotic process automation (RPA)

RPA uses robotic process automation technology that utilizes digital workers or robots to automate tasks generally performed by humans. Digital workers automate backend office tasks like customer onboarding, security checks, account maintenance, closing, etc. Digital workers finish these tasks more efficiently and quickly, a significant benefit of the RPA. Implementing RPA helps in reducing costs and improves the overall organizational efficiencies.

Embedded Finance

Embedded finance is a term that indicates the offer of financial services by companies that don't have any say in this sector. These companies strengthen their relationship with the customers by providing financial assistance, thus improving their services and developing other sources of revenue. The growth of this trend has resulted in Fintechs offering banking as a service solution.

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