Introduction
Fintech is derived from a combination of two words “finance” and “technology.” A Fintech company is thus an industry that uses technology to carry out all manner of financial services. Technology keeps on evolving so we can expect certain Fintech trends to emerge and others to disappear. Though there are many Fintech trends, we shall briefly discuss banking and cryptocurrency.
A bank is one example of a Fintech institution. Before the Automated Teller Machine (ATM) was invented, many people were employed in banks. It is estimated that there were nearly hundreds working in the bank. Banks thus had a big burden of paying many of their workers. After the ATM was invented, many people lost their jobs since their duties in the bank were deemed redundant. An ATM can do the jobs of 500 people within a short time.
Cryptocurrency is another form of payment for goods and services. Think of it as a digital currency, rather than paper money. Bitcoin and Dogecoin are common cryptocurrencies that are used, but there are many others you can choose from. To be able to possess any cryptocurrency, you would need to form an account. In the account, there is a wallet where your digital currency can be stored. To possess any cryptocurrency, you could purchase them, mine them or play games which reward you with them. Businesses are yet to adopt this form of payment.
Fintech companies such as AllFront have helped companies that are fully stacked with back-end developers but have neglected the front-end side of their applications and use their capabilities to finish their projects through constant progress and professional workflow optimization.
There have been predictions put forth by Fintech firms that may shape the future of finance industries. Let’s explore the six predictions below.
Fintech institutions will continue to grow rapidly
The COVID-19 pandemic slowed down most industries worldwide. Cessation of movements put in place by the government reduced the rate at which clients sought goods or services. People expected Fintech institutions to collapse following the disease. Experts however think otherwise. They have pointed out that these organizations made use of digital platforms to continue serving their clients. The use of the internet or company applications means people can still pay for services remotely.
More people will trust Bitcoin
Bitcoin wasn’t always positively received. Still to this day, there are people sceptical about Bitcoin because they do not think it is genuine. Its price has been rising and falling in the trade market hence people have begun to question its value. People put their trust in stocks yet they also rise and fall. Experts theorize that people will trust it more due to it being decentralized. When the coin is decentralized, no bank or government is in charge of it. Furthermore, it is scarce like gold, and this makes people and Fintech institutions put faith in it.
Online payment systems will not fully catch on
Even with the popularity of digitizing every sector, you can think of, people are yet to embrace online payment systems. People who pay using online systems such as credit cards incur an extra cost. Poor people are more likely to stick to paying in cash than pay via credit cards as they will be charged more. In many countries, the poor population has increased; which means online payment systems may take a while to catch on.
Increased digitization
Experts have pointed out that more employees will work from home as opposed to going to work in their offices. Workers like managers and supervisors, however, will still need to go to their offices. You can enjoy banking services just by using your cell phone. Bank workers can receive their salaries on their phones so most Fintech organizations are adopting this method of paying them.
Adoption of cloud computing by banks
Most banks will increasingly adopt cloud computing as a way of serving their clients. The pandemic forced most banks to devise ways of serving their customers remotely. For instance, if a client wants data about themselves; the banks could simply log onto the cloud system and retrieve their data. They do not have to meet. Experts predict banks will also adopt clouding so that they are not rendered irrelevant once other banks adopt clouding.
Rise of open banking systems
Nearly every Fintech organization has apps you could download to access their services. Open banking services provide financial services to users through third-party users and this is where the apps come in. Building apps is a combined effort hence third-parties get involved. Third-parties need the client’s consent to use their data e.g. comparing data. There are however concerns of privacy even with the prediction open banking will be embraced.
Conclusion
Some of the expert predictions mainly stem from the emergence of the pandemic. However, it is difficult to predict the direction of a country’s economy. The predictions may either age well or poorly.
