What is the Future of Fintech?

Just like many other sectors of the economy, fintech needed to adapt to the new reality that we live in a while dealing with the aftermath of Covid. Fortunately, there are many new advancements that were made in preparation for what the future has in store. This is why we decided to take a closer look at the Fintech area to see in what direction the industry is headed and what you can expect in the future. 

Contactless Payments are Here to Stay

A big part of fintech in 2021 has been contactless payments. Many companies in the private sector and government organizations have put a lot of emphasis on the importance of contactless payments in the wake of Covid and the additional layer of protection such payments offer. Moving forward, you can expect to see companies integrating advanced payment apps and payment systems that allow you to make intact payments. As a result, cash transactions will become even rarer since companies will encourage online transactions because of the new built-in features and conveniences, but also because it is safer. 

Future fintech is also paving the way for more streamlined checkout processes and self-services functionality in stores and banks. We are already seeing the new Amazon Go store locations popping up that do not have a single human employee working there. Customers can grab an item and walk out of the store. All of the payments are made through the Amazon Shopping app. The future of fintech 2021/22-25 will offer even more such conveniences. 

We Will See Growth in Embedded Finance and Banking as a Service

In the old days, customers needed to go to a bank if they needed any kind of financial service. This meant that payments, lending, and other services always needed to be done separately through the bank, which added a layer of friction. Recently, we saw a rise in startups that made accessing financial services easier than going to a bank. The next step would be to re-bundle finance but not back into the banks. We are now seeing the rise of embedded finance, which is the use of Banking-as-a-Service and API-driven banking and payments services to integrate financial services within other environments and ecosystems. 

Businesses can use APIs to simplify interactions between systems and services. For example, Uber has recently launched a bank account that’s targeted at the needs of their drivers. Grab delivery service is also offering financial products such as POS, insurance, and many other things. Expect embedded finance to become prominent in the future of fintech. 

Increased Role of Virtual Reality

Virtual reality is becoming increasingly used by companies across industries, and we are now seeing it in fintech as well. In fact, we saw companies, like Worldpay, experimenting with VR payments as far back as 2017. The way it works is the user would pick up an item in the virtual world, just like they would do in the physical world, and they will be able to purchase the VR system itself. There are many conveniences to such AR payments. First of all, the payment information can be visualized, which makes it easier to track activity, better identify users and check the account balance to prevent overdraft. All of this is in addition to the flexibility and seamless experience offered by VR. 

Another interesting future fintech trend involving VR is virtual banking. We already see many banks embrace such solutions, like the Italian bank Wadiba. Basically, instead of having physical branch locations, you have virtual ones that offer the same services and conveniences. All the user would need to do is download the bank’s mobile app and then put on a pair of VR glasses, and they will be able to step inside the virtual reality bank. This is one of the most interesting and innovative examples of fintech software development. 

The role of VR will be expanded even more in fintech because of its immersive nature, flexibility, and ease of usage. It can offer people greater control over their finances and make it easier to invest since it can visualize all of the financial information to make a more informed decision. It can also increase satisfaction with the banking services offered by financial institutions and other companies. Simply put, VR will be an invaluable asset to fintech in the future. 

Greater Emphasis on Inclusion 

The pandemic has disproportionately affected various parts of the population in the US and other countries, and fintech is helping people get access to the financial resources they need. This is also an area where fintech is changing banking supervision since it offers greater transparency into compliance. What we are seeing is the rise of prepaid services to enhance universal access to products and services. More advanced inclusion features can be found in products like WeChat, which is used in China. People can get updates from government and company accounts, make payments, apply for a loan and even order a taxi. 

The British fintech giant Revolut has also expanded its service offering from simply offering customers an easy way to make payments across borders. Now it is offering additional tools for investing in commodities and cryptocurrencies, and many other financial services. Since inclusion is becoming more and more relevant in our society, you can expect companies in the fintech sector to come out with new products to make sure various population sectors have access to the services and products they need.

Is Fintech the Future? 

Since pretty everybody needs access to one type of financial service or another, we can say that fintech is definitely the future. However, to take advantage of technologies like virtual reality and others we discussed earlier, you will need to partner with a trusted service provider. Skywell Software has extensive experience in developing fintech software. Our skills and experience allow us to actualize even the most innovative and imaginative products. Contact us today to learn more about how we can help you.