By YapStone for LTP
When the media talks about FinTech, more often than not, the leading headline is a bold statement, like “the FinTech revolution,” or “the big bank disruption,” and it’s easy to see why. Dubbed by the Economist as a “magical combination of geeks in T-shirts and venture capital,” the growth and influence of FinTech have been rapid.
Let’s check out the facts. In 2013, the global value of FinTech was estimated by Statistics at approximately $3 billion. By 2014, FinTech firms had already attracted $12 billion of investment, and by 2015, that figure had risen to over $20 billion globally. As we move into a new year, FinTech disruption, capital and influence continue to grow. Indeed, and many companies and leaders in FinTech today believe that it is just the tip of the iceberg of what’s to come.
Here are the hottest trends to look for in 2017:
Growing focus on AI
Many FinTech experts agree that 2017 will be all about artificial intelligence. As the capabilities of AI evolve, FinTech companies will harness this technology to make better decisions and offer improved solutions. They’ll make use of predictive analytics to break down big data and analyze large volumes of consumer information. APIs will allow for seamless integration and partnerships between established banks and FinTech startups.
This will create an enhanced user experience, with more intuitive interfaces, assisted customer interactions and robo-advice. To maximize the benefits of AI in 2017, Gada explains that banks will need to develop a better understanding of “off-the-shelf offerings and architectural requirements.” They should also “carefully look into features (such as scalability of solutions) and check on regulatory aspects,” while deploying AI.
Greater mobile transactions
In 2017, almost a quarter of all US adult smartphone users (45.8 million people) will use a P2P payment app at least once a month. According to the Pew Research Center, 72% of US adults now own a smartphone, which means there will be greater demand for mobile transactions. Mobile and contactless solutions will continue to gain traction in the coming year. This will allow retailers and payment providers to offer seamless transactions for purchases of all types and sizes.
This will impact our day-to-day lives significantly in the coming years. An upwardly mobile world combined with improved technology will create “more opportunity for disruptive models to find success,” which can only be good news for FinTech.
Wallets become superfluous
As consumer purchasing habits evolve, the smartphone attached to your hand will be more important than a physical credit card. With contactless card transactions expected to double worldwide by 2021, you’ll start leaving your wallet at home this year. FinTech companies and apps will make purchasing easier and stores will allow payments directly from a mobile.
There will be less need for separate cards and cash as one-click purchasing from your handheld will become the new norm. If you’re the kind of person who struggles to get out of the house with all your necessary personal items, then you finally have one less thing to think about.
As mobile and contactless transactions increase, there will be a need for improved security measures to prevent fraud. This will shift to being biometric in nature and make consumer data infinitely more precious. According to Engadget, fingerprints alone are not enough. So, it’s likely that transactions will involve multi-step security, such as fingerprint recognition, face recognition or iris scans. Pretty great if you’re always forgetting your passwords!
This technology is already widely used in government applications but will move towards consumer transactions this year. Just as we can cross borders without speaking to a customs official with an e-chip passport, we’ll start to identify ourselves the same way when making payments. Over the next few months, we’ll see mobile apps appearing that use biometric information for completing payment transactions.
Rise of the cloud
Mega-vendors will lose market share to the more agile cloud vendors. Indeed, as the benefits of cloud computing have become obvious to us all, a staggering 93% of businesses now use cloud technology in some form today.
Industry giants, including Oracle and SAP, continue to take their time migrating to cloud software delivery, which means they will be less able to meet the demands of their customers who have already fully migrated. This will provide greater opportunities for nimble FinTech innovators to seize a slice of the mega-vendors’ market share. Move over IBM, the new kids are on the block.
With so many directions for growth over the coming year, 2017 is set to be another memorable one for the FinTech industry. Just as you’ve come to expect from the techs in T-shirts, seamless transactions and easier ways to pay will be on top of the list. We leave traditional data centers and hard-wired connections behind (as well as our wallets), for a faster, sprightlier way of doing things for companies and consumers in the coming year.
First appeared at LTP