We think that 2018 is going to be a huge year for the FinTech Software industry, with growth across the board, though a few standout sectors will likely steal the limelight.
In this piece, we will explore five sectors that we expect to see exponential growth or huge leaps in technological progress being made in within the Fintech Software world.
We start with…
In 2014, it was predicted that by 2018, more than 60% of adults would be banking digitally in 2018. This was confirmed by Statista, who have demonstrated that internet banking usage grew by more than 100% between the years 2007 and 2017.
As the technology has evolved, so has the number of users, and that’s because more and more services are moving away from the branch, and into the app. By saving on staff wages and branch rentals, banks are pouring money into mobile and browser banking experiences that feature high-level security features, AI technology and facial recognition.
As well as existing banks improving their online service, we are seeing the emergence of digital-only banks, such as Atom, PYMNTS, and Penta. By integrating the features mentioned before, with chatbots, apps, microservices and data science, they are able to offer high-value services with greater scalability.
Chatbots are vital to the development of digital banks, and so these institutions are investing enormous amounts into their programming. The digital banks are also looking for solutions to aid their PSD2 compliance in accordance with how rapidly the innovations are being developed.
FinTech software development is really going to boom in the field of digital / P2P lending in 2018, and here’s how:
- Introducing new audiences
- Automation of some processes
- Better user experience and faster lending approvals
P2P lending has a major aim in 2018 too, which is to make the loan-decision process faster while lowering costs, all while creating a user-friendly journey. Machine learning will drive improved processes, fewer mistakes and allow money to be received faster. Those who are not eligible for loans will be spotted quicker and the credit score system will be more streamlined for spotting credit-worthy candidates.
This will not come without some challenges, such as:
- More transactions and requests
- Scaling challenges for P2P platforms
- The potential for crypto-involvement.
Personal Finance Management
The purpose of personal finance management is to allow customers or users to handle their income, expenditure and other financial movements, such as investment. The categorization, data visualisations, trends and even forecasting are usually displayed through mobile and web services, and can sometimes be connected to a bank account or open banking API.
In 2018, as we have explored in this article, it is robo-advisors, or AI chatbots, that will experience the most growth in 2018, as their capabilities begin to expand and really be explored. As these bots collect data, not just from your personal finance activities, but from millions of data sources on the internet, they will be able to help inform decision making in a trustworthy way, with lower risk than their human counterparts.
Investment and Trading Platforms
We can see the growth of investment platforms as a reflection of all of the above FinTech Software sectors experiencing growth, as investment platforms hold and manage all assets in a single location. Whether as a mobile or a browser-based service, users or customers can buy, sell, and hold stocks, shares, forex, funds, cryptocurrency and derivatives, and check their value at any time.
Speed, security, AI, data analytics and analysis tools are all areas of investment platforms that we expect to see developmental growth in during 2018, and in 2019 too. Investment funds are likely to benefit a great deal from the improved technology, which will enable them to make better, more complex, and more informed investment decisions.
How could we get through an article about FinTech growth without mentioning the Blockchain? With cryptocurrency introducing a modern financial revolution, it’s natural that this would enter the FinTech Software world and create a symbiosis between distributed ledger technology and the software that investment firms require.
Here are the areas within FinTech Software that are most likely to benefit from the decentralization, recording and fault tolerance of the Blockchain:
- Trade processing
- Cross-border / International payments
- Anti-money laundering
- P2P lending
- decentralized exchanges (0x…)
- even legal processes (Kleros)
For firms who wish to implement private blockchains against the risk of espionage or theft, there are huge gains to be made due to the inherently secure nature of the technology; though this is speculative. Those who make the step now are likely to themselves experience exponential growth in 2018, 2019 and beyond.