THE 2022 FINTECH OUTLOOK: DATA, DIY FINANCE AND ROBO-ADVISERS

by Matthijs Aler, CEO of Ohpen

 

Ushered in by the pandemic, a wave of hyper-digitisation and new opportunities has swept across the fintech industry over the past year. And it’s not about to stop.

With another period of hybrid working and continued COVID-19 changes lying ahead, consumer and business circumstances are becoming more complex than ever. These increasingly unique needs call for modern IT to solve each individual case. This is where fintech alliances are set to really make their mark next year by supercharging customised financial products, services and the time it takes to put them in market.

What does this technology actually look like, and how will it make its impact in 2022?

 

More predictive analytics, fewer linear business models

With the pandemic’s impact set to keep rippling through consumers’ personal finances next year, advanced predictive analytics will be a crucial part of credit and arrears management strategies. Working on both macro and micro levels, AI will continue to find patterns in complex data, and pick up trigger points across consumers’ financial behaviour – for example spotting credit problems before they escalate.

With algorithmic trust growing across business, financial advisors will look to AI to predict exactly which accounts and clients may need monthly interest and loan repayment support. In fact, this trend will continue well beyond 2022, as digitising the credit space becomes

Matthijs Aler

increasingly important. Data-driven tech will supersede traditional linear business models when it comes to supporting today’s growing gig economy and flexible work situations. We are set to see financial institutions become one-to-one support networks, using data to build tailored experiences for every single customer.

 

DIY finance 2.0

But AI doesn’t stop there. This power of AI-led prediction will eventually be handed directly to the consumer, too. In fact, we are about to see unprecedented levels of data, information and guidance built into consumer omnichannel experiences.

Financial institutions have already stepped up their digital offering for consumers – but 2022 will see heightened consumer autonomy across personal finance management. Recognising the benefits for all parties, in a pandemic age of helping customers help themselves, the savviest banks and financial services providers will offer up more predictive analytics directly to consumers across digital channels that are powered from modern cloud core-banking platforms. This will empower consumers to better control their bills, debts, cash and loans autonomously, lowering credit risks for the financial services providers involved. Likewise, as data becomes more structured, explainable and aggregated – financial institutions will finally have a 360-view of their customers, enabling them to open up a new world of tailored propositions.

 

The Human vs Machine paradox

This evolving tech saga will enter yet a new chapter in 2022. For certain financial processes such as insurance and some investment propositions, robo-advisors and background automation are set to become more prominent across the board.

Across other complex products such as mortgages, robots are unlikely to replace humans any time soon. However, the hybrid balance is set to shift significantly. Across mortgage and loan origination and underwriting processes, robo-advisors will increasingly pull together the data across these functions at speed to arm customer facing advisors. This will certainly push human consultation further towards the end of processes, yet paradoxically get the customer to reach it much quicker, sparing them of dozens of online forms in the process.

Friendly, professional advice will forever remain the most vital link in the financial chain, yet this move from 50/50 robo-human to 75/25 will better leverage the power of human analysis, locking in consumer confidence from start to finish.

 

2022: Continuing the digital trajectory…
Fintech can potentially unlock more time and customisation for business and individuals alike from next year. Consumers stand on the brink of more digitally-enabled financial autonomy, while financial institutions and advisors can speed up their manual processes and focus on the things that matter most.

To do this right, though, fintechs must enter 2022 armed with the right back-in banking technology to enable true digital experiences that empower their customers’ financial lives.

 

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