Coming out of a pandemic, life should be returning to somewhat normal. That means 2021 could be a very exciting year as new technologies start rolling out.
Nowhere are expectations higher than in the banking and financial services industry. At a time when digital currencies are becoming more prominent, there is an entire evolution taking place in the banking world with new technologies leading the way. Let’s take a look at a few Fintech trends that are coming on the horizon.
Providing Banking Services to the Unbanked
Advanced nations often forget the challenges third world and emerging countries are facing. It’s amazing to think that as many 1.7 billion people in the world don’t have bank accounts. What’s even more amazing is 1.1 billion of those people do have cell phones.
In 2021, there will great technological advancements geared towards establishing digital mobile banking and financial services for people who have never had access to such service before. Digital banking services would help disadvantaged people be able to receive government assistance payments and send and receive money right from smartphones. In countries like China, India, Indonesia, The Philippines, Nigeria, Mexico, and Pakistan, this will change the quality of life for a lot of its residents.
Expansion of Blockchain Technology
The world of P2P (peer to peer) financial transactions is quickly becoming a reality. The introduction of blockchain technology came by way of the digital currency revolution. By decentralizing crypto transactions, consumers and traders have quickly learned that the removal of centralized enablers like banks has made transacting business more efficient and private.
Blockchain figures to be prominent in the next couple of years through two avenues. First, digital currencies like Bitcoin have officially exceeded fad status. The number of customers and merchants that are transacting business with digital currencies is increasing every day. Nowhere is this more obvious than in emerging markets like India. Previously India had a strict ban on trading cryptocurrency, but that all changed in March 2020 when the ban was lifted. Now P2P Bitcoin trading in India has exploded with total monthly volume doubling month over month. Second, the transition towards digital banking is already underway with the blockchain providing the infrastructure.
After establishing scalability, the only challenge that remains with blockchain is educating end-users. The idea that banks can be removed from the transaction process is more than a little intimidating for people who don’t understand the concept of a decentralized registry.
The Uprising of Neobanks
What are neobanks? They are digital-only banks that exist only over the internet. Without brick and mortar bank facilities to visit, people would be able to handle all their banking needs online. It’s a great way to bring the unbanked together with the rest of the world where all money transactions will be handled fast and efficiently online.
Customer Service Through Artificial Intelligence (AI)
In recent years, several major industries have already been taking advantage of AI and machine learning (ML) algorithms to address customer needs. The banking industry is one of them with banks like Morgan Stanley, the Bank of America, and JPMorgan using chatbots to handle customer inquiries.
In 2021, “conversational banking” will become more prominent in the banking and financial services arena. People will be able to resolve banking issues and request financial services without having to sit on hold while waiting for overworked customer service agents.