Fintech: what to expect in 2019
Fintech has been the driving force of the financial services industry during the late few years. It has opened up ways to provide financial inclusion to the unbanked, especially in emerging markets and has reshaped the industry in many ways, creating multiple subcategories in several sectors besides banking, such as insurance or regulation. Because of fintech products, people make cross border remittances easier, loan decisions are made through an increased number of data points, while in the same time regulatory tools are becoming more automated.
Fintech is transforming the industry and will continue to do so as the industry seems “thirsty” for innovation. This is expected to lead to another year of significant growth due to new products or technologies which in turn are expected to improve the lives of million people worldwide.
Fintech is a global phenomenon, yet its development is not linear and the spearhead varies from region to region. It’s apparent there are differences with models and adoption between the western world and emerging markets, due to the specific needs of these regions. In emerging markets fintech companies cannot rely on the same payments and banking infrastructure that exists in developed markets. The broad availability of cloud computing, machine learning, and big data services (a field where Channel VAS is very well positioned) have allowed companies to tackle these challenges in a much more cost effective way. Based on big data analysis that relies on hundreds of data points per customer to analyze financial behavior these products provide micro and nano finance solutions, supporting financial inclusion for all. Among them, handset loans play a crucial role, providing low income population with the ability to acquire a smartphone, which is the necessary tool for fintech growth. It’s safe to say that in the years to come these fintech services will continue to grow, due to massive unbanked population of Africa, Middle East, Latin America and Asia.
At the dawn of 2019 many analysts are making their predictions of what will happen during the next months in the field of fintech worldwide. Let’s see five main trends of fintech market according to the analysts of G2 Ground.
Artificial Intelligence and Robotic Process Automation. Analysts predict that Robotic Process Automation software will be used in 75% of financial services institutions by the end of the year due to the increase of connected devices and
tools to process that data are driving the creation of personalized products based on an individual’s data sets. This makes the need for big data analytics and a profiling platform, like the one Channel VAS is providing, a major game changer in the fintech field.
Global growth of mobile payments. The worldwide volume of mobile payments is expected to grow by 60% over the next two years, while in Latin America and Sub-Saharan Africa Mobile growth will reach 75% during the same period.
Fintech App Development. Analysts predict that 75% of large banks will be actively engaged in supporting fintech application development through open banking. In this field Europe is expected to play a leading role, due to Payment Services Directive 2.0 (PSD2), a European Union regulatory directive designed to increase competition within the European payments industry.
Fintech Companies Become the Norm. Fintech companies will shift from disruptors to partners in the financial services industry, to be treated as equals in the field by their traditional counterparts, creating mutually beneficial partnerships.
Regulatory technology. Regulatory technology (regtech) investment in the financial services sector will increase 500% by 2020, from $10.6 billion in 2017 to more than $53 billion.
All the above trends strongly showcase the future of mobile financial services and micro/nano loans is strong, especially combined with the evolution of handset loan schemes that allow people to be easily included financially. The future indeed looks bright!
- The intriguing fintech market of Sub-Saharan Africa
- Channel VAS will share its knowledge at 4YFN in Barcelona
- Fintech dominates investors’ choices as startup funding in Africa hits record levels
- Bassim Haidar at Davos’ World Economic Forum: Western world should change the approach towards Africa
- Informal Employment and Alternative Lending from fintech services
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