Technology and finance have always been intertwined, from the invention of the abacus to make financial calculations easier, to the super computers that are used to drive complex financial models today.

Apart from increasing access, technology has also driven a variety of drastic changes to financial systems around the world and in some cases, upturning entire sectors. The fintech revolution is continuous, however, and the following are some of the most pivotal trends which have huge potential to shape the future of finance.

1. A Mobile First World

Cash is not dead. Yet, it is clearly on the way out though, as the world steers away from physical contact and mobile payment options become widely available. From neo banking start-ups to banking and technology giants, enabling finance on mobile has become a priority for all key players in the financial services industry.

With more than 7 billion mobile devices on the planet, increased adoption of card-less ATMs, deeper biometrics authentication, voice recognitions, machine learning bots for surveillance and customer servicing, fraud prevention using big data analysis, increase automation of bill payments and personalised reporting are on their way to become an integral part of financial lives of large number of consumers.

The evolution of mobile banking services is enabling a staggering number of customers to bank freely from anywhere and (almost!) everywhere.

2. Finance, Delivered via Cloud:

We’re living in the era of cloud, with the majority of companies moving their infrastructure to cloud and allocating sizable chunks of their IT budgets to its maintenance. How will cloud drive the future of Fintech? For starters, it enables remote self-service applications, a trend which has grown monumental importance in the pandemic crisis.

In addition, cloud computing enhances the agility of financial institutions and makes scaling up services easier and quicker. Since they only pay for services they use, cloud computing can help financial institutions control costs.

Moving forward, (especially in the pandemic-driven remote-working world), the cloud will become increasingly important for hosting, scaling and managing financial services and operations.

3. Open API Ecosystems

APIs allow different technology systems to communicate - and have evolved into crucial building blocks that connect organisations and facilitate the development, functioning and scaling of new applications and platforms.

There now exist APIs for almost everything in FinTech, including Financial Market Data, Payments, eCommerce integrations, Banking, Identity Verification and more. The accessibility and integration of financial APIs create opportunities for entirely new ecosystems of applications and interoperability between online services.

Leveraging these APIs allows for faster solution development, avoiding redundant re-work, and ultimately the capability to launch bigger and better solutions faster in the market.

4. Artificial Intelligence, Real Use Cases

Technology is getting smarter by the day - and the most prominent flavours of utilising Artificial Intelligence in Fintech include:

- Reducing operational costs, processes automation
- Tapping into deeper customer insights and improving customer experience
- Credit Scoring and Robo Advisory
- Algorithmic Trading and Predictive Analysis
- Fraud Detection and Surveillance

AI is no longer an object of fascination in science fiction, and has the potential to fundamentally change how financial experiences are curated and delivered to the masses in the near future.

5. RegTech and Compliance:

Coping with the width and depth of new regulatory changes imposes high complexity and stringent timelines on financial institutions across the globe. Financial institutions and intermediaries will increasingly adopt specialised RegTech services to
- manage the frequent additions / modifications of regulations
- avoid the financial and operational risks of non-compliance
- streamline and automate the processes for identifying, implementing and testing the impact of compliance requirements across their range of products and services.

RegTech holds credible promise in the face of ever-increasing complex regulations, and can help FIs deploy holistic frameworks not only for enabling business efficiency, but also for establishing competitive advantage.

Cybersecurity as an important pillar of digital financial operations: Financial institutions and intermediaries deal with millions of data points every day related to confidential, personal and financial transactions details - making it a gold mine for hackers. As financial services have moved from face-to-face to remote interactions, security has been one of the major concerns that all stakeholders have had to deal with. Cybercrime has continued to rise at an alarming rate, and ransomware payments are gradually becoming a standard operating expense for many companies. Increasingly, advanced analytics, real-time monitoring, AI and other tools are required to detect potential threats and stop them before they strike - and many disruptive start-ups and companies are innovating fast to provide these services.

We’re seeing a rise in a variety of other trends that will also contribute to and shape what fintech looks like for all of us in the next few years - including the rise of mobile-only neo banks, deeper intervention of cyber security, disruption via blockchain, and more. Improving consumer experience, using technology to create business models that are resistant to sudden recessions, upgrading the pre-Covid-19 tech stacks, and implementing smarter functions to automate tedious work to reduce operational costs and risks - are key themes for the evolving landscape of fintech in the coming years.

The author is Co-Founder and CEO, uTrade Solutions

DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.