The fintech revolution certainly didn’t slow down in 2018. As innovators continue to develop more convenient alternatives to traditional financial services,consumers also continue to embrace them. There’s no reason to believe 2019 will be any different.
That’s why it’s an appropriate time to consider what the coming year might mean for the industry. As always, it’s not possible to predict the future with complete accuracy, but evidence suggests these key fin tech trends will be worth following in 2019.
Incorporating Messaging Technology
This blog has already pointed out that developments in voice technology and AI-based chat bots will have a major impact on fintech services.
Remember, fintech products succeed because they make life easier for people. Thus, it makes sense that both new startups and established financial institutions will incorporate voice-activated features into their products. Although performingbasic financial tasks via a mobile phone is certainly easier than traveling to a bank to perform them, the process becomes even simpler when users can speak directly to a virtual assistant to complete these tasks.
Expect chatbots and other so-called “conversational user interfaces” (CUI) to step into offer 24/7 customer service. Instead of waiting for a representative to become available when reaching out to a bank, customers will soon be able to chat with AI bots who can assist them in many of the same ways a human representative might.
The Rise of Insurtech
Insurtech is a subset of fintech, which, as the name implies, offers alternative insurance services. Although insurtech products already exist, it’s likely they’ll become more popular in 2019.
That’s because insurtech serves to address the needs of billions of uninsured people worldwide. Fintech has helped underbanked and unbanked people take advantage of the financial services that traditional banks have largely failed to provide them—and so too will insurtech help uninsured people get the coverage they need, outside of traditional providers. The insurtech sector will also likely get a boost from business owners who want more options than traditional insurers can offer.
Increased Mobile Banking
Although mobile banking has been around for years, evidence shows the sector will continue to grow throughout 2019 as more and more consumers abandon traditional financial institutions in favor of more convenient mobile options. That’s just another reason why established banks need to determine how they can collaborate with fintech startups to maintain their relevance.
Banks that treat these shifts as opportunities will be the most likely to succeed.After all, while fintech companies offer innovation and convenience, they may lack traditional banks’ access to capital, brand-name familiarity with customers, and deep knowledge of the complex regulations that apply to the financial services industry. Banks can leverage new startups’ disruptive technologies while also offering their own expertise to establish a mutually beneficial relationship.
Fintech companies are often able to provide better alternatives to traditional financial services by leveraging data. For example, fintech-based lending companies have been known to approve loans that other lenders might not. They’re not engaging in predatory lending, however—they simply have more access to customer data than other lending firms. This helps them make better decisions regarding whether an applicant is deserving of a loan.
Trends show that more and more people around the globe are going to be using mobile devices in the coming years. (In 2011, just 35% of Americans owned a smartphone; in 2018, 77% of Americans have one, according to the Pew Research Center.) Increased participation in the digital world will translate to an increase in the availability of consumer data. It’s not unreasonable to assume that fintech companies will make use of this additional data to learn more about how to best meet the needs of their customers.
More Biometric Security Systems
For obvious reasons, security is a major concern of customers when accessing financial services. That’s why it’s important for any fintech startup to make this a primary focus from the earliest product design stages.
That’s also why many experts suspect that biometric security will become more common in 2019. For example, some banks have already begun to develop iris-scanners to confirm the identity of customers before allowing them to access their accounts. Clearly, unique features like a person’s iris or fingerprint are much more secure than a PIN code. Expect to see both fintech companies and traditional banks making greater use of these security measures in the near future.
Identifying the Limits of Technology
It’s possible to argue that we’re reaching a unique turning point in the fintech revolution. Up until recently, we’ve seen technology rapidly replace humans in key financial services functions.
However, even the most enthusiastic fintech supporter would likely agree that customers don’t want technology to replace humans entirely. For example, even if AI can offer sophisticated investment advice, customers may still want to speak with a real financial advisor to understand how that information fits into the overall context of their goals.
Thus, 2019 may start to see fintech establish limits and think more deeply about the best uses of technologies—in other words, to place importance on the “tech-touch balance.” While technology may be able to replace some human interactions, customers might not want it to. Identifying these limits will help both fintech companies and traditional financial institutions better understand how to give consumers exactly what they want.