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The financial scandals and controversies associated with banks and NBFCs are a major reason why people are losing confidence in conventional lending platforms. The timing couldn’t be better for Fintech companies that have already entered the market and are gaining ground in the financial services industry.
Here are 6 fintech trends that are fast taking over traditional banks with the power of technology:
- Easy Funding for Small Businesses Available on Personal Loan Apps
Following the financial crisis of 2007, banks have become very stringent with their loan approval process for small and medium-sized businesses as they are volatile. This is where Fintech companies have gained an edge over banks and NBFCs. They have come up with instant personal loan apps that offer quick cash without making people go through a long approval process and endless paperwork.
- Interactive Customer Service with AI-Powered Chatbots
Fintech companies are employing chatbots to streamline customer-facing transactions, addressing queries, processing loan applications, and directing consumers to appropriate departments. Certain chatbots can also learn from human interactions and help consumers find useful information. AI-powered chatbots also provide investment advice, trading instructions, and reduce costs by eliminating the need for human agents.
- Instant Money Transfer on Smartphones
Gone are the days when people had to carry cash for making payments. Today, there are several apps that can be linked directly to bank accounts and credit cards on mobile phones for making instant payments. Being super quick, convenient and safe, this mobile payment market is estimated to grow up to $3.4 trillion by 2022.
- Real-time Fraud Detection with Machine Learning
With the increasing sophistication of scams, financial threats, and virus attacks, machine learning and artificial intelligence are being used to identify fraudulent transactions, avoid data theft, and gain customer confidence.
Data aggregation frameworks are now being designed to mine unstructured operations and account information to offer a 360-degree view of transactions in real-time. And, machine learning algorithms are being used to leverage historical data to determine behaviour patterns and predict the possibility of frauds and attacks beforehand.
- Quick Authentication Using Biometrics
Fintech companies are increasingly interested in using biometrics like face recognition, thumbprints, fingerprints, voice patterns, and irises for adding a layer of security to financial transactions. Biometrics facilitate quick authentication in smartphones and ensure safe financial transactions.
- Faster Digital Transactions on Blockchain Technology
Cryptocurrency has revolutionized the banking landscape by providing users with faster and cost-effective ways to make transactions. Blockchain technology works on a distributed ledger system which uses rigorous controls to deliver auditable data for smart contracts.
This fintech technology is transforming bank payments by making them faster and safer. Blockchain technology ensures transparency, minimizes human errors, reduces transaction fees and reduces risk.
Conclusion
Fintech companies have evolved as disruptors for traditional banks and NBFCs in the global financial market. Mobility, online payments, chatbots, and apps that facilitate on-demand, personalized and secure financial transactions have proven to be highly beneficial, time-saving, and cost-effective for the entire financial services ecosystem.
Today, fintech trends have taken over everything from authentication and customer service to fraud analytics and transactions. This is why banks are now collaborating with fintech companies to offer customers all of these facilities and much more. Fintech technology has helped many banks streamline their operations and provide seamless and speedy services to their customers and retain them.