Stay ahead in Fintech: RegTech, AI, and DeFi

Victor Fredung, CEO, Shufti Pro


While overall fintech investment is said to be on a downward trend, it cannot be disputed that there are continuous advancements in the industry. From AI adoption to increased use of regulatory technology, there are numerous changes and trends businesses are already seeing and can expect to see more from.

With the ever-developing technology in the market, fintech companies will begin to implement the most appealing features in an attempt to enhance customer experience, reinforce business propositions, and of course, increase revenue. Having insight into the top three trends within the market will help fintech businesses carve out the most profitable adaptations to their platforms.

1. Regulatory technology is on the rise

Regulatory technology, or RegTech, is a branch off of the fintech tree that focuses on technology to track regulatory procedures. This subset is becoming increasingly popular amongst fintech businesses and institutions as it begins to revolutionise compliance processes across the board.

As more financial services continue to pivot towards digitalisation, the level of risk around regulation can begin to rise if not protected against. With digital change being seen as both a breeding ground for innovation and risk, businesses need to be vigilant towards fraud, hacking, data breaches, etc. This is where RegTech solutions come in.

Throughout the year, we’ll begin to see a great uptake in the use of RegTech across fintech companies to transform their platforms, making them more attuned to safety protocols for both themselves and their customers.

2. DeFi & Blockchain is just getting started

While the cryptocurrency market has suffered a major blow in the past year, the crash does not necessarily equate to the death of crypto. In fact, the overall global economy has simultaneously taken a hit which is largely responsible for the crypto crash.

Although the crypto market share may be down, technology continues to rise. Blockchain technology has been presenting the promise of its numerous real-world applications, and will undoubtedly gain traction as people get their heads around the logic and potential use cases.

One of the key drawbacks of blockchain and decentralised finance (DeFi) is the expensive, slow process of transactions. Since crypto is here to stay, continuous advancements such as fast and low/no fee transactions are at the top of many leaders’ agendas.

3. AI Automation

Artificial intelligence (AI) is very quickly becoming extremely popular, thanks to tools such as OpenAI’s ChatGPT, and almost every industry can benefit from these innovations. While a lot of the technology is still in its infancy, early adopters are spurring development through various tests. The two major benefits to the fintech industry are AI decision-making and conversational AI.

Whilst decision-making can make a significant difference in fintech, the process requires time, high attention to detail, and labour – all while businesses are trying to maintain their competitiveness. AI can revolutionise this by evaluating facts and determining solutions, based on the available data. This means fintech professionals will not only be able to stay on top of their competitors in the market, but also optimise their work.

Fintech companies also deal with a plethora of questions and queries from customers and usually have to go through the process of waiting to connect to an operator for help. Conversational AI can greatly improve the customer experience, by reducing the wait time, thus increasing retention rates. This technology not only reduces the need for banks to hire numerous operators but also combats the slow response times faced by customers.

Innovation, Development and Adoption

As the fintech industry is always moving and elevating, it is expected that we’ll continue to see many more trends and developments in RegTech, AI, and blockchain over the coming months. As businesses begin to experiment and implement the technology in various ways, there will be even more potential applications and ways of improving numerous daily processes. The greater the adoption rate, the faster we can learn from and develop with AI. Digital transformation has certainly been a pivotal moment for many financial institutions as they begin to invest in the innovations and technologies to transform their platforms.

By implementing and becoming more attuned to trending features, fintech companies will start to reap the benefits of a more aligned and tactical approach to regulation, blockchain, AI, and many more possibilities.

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