Digital Transformation in the Finance industry is limitless. Fintech companies acquired $25.6 billion globally in investments in H1 2020, according to the latest fintech industry report. Undoubtedly we have seen remarkable growth in the global fintech industry over the years. Also, the financial industry is proactively transforming its services with cutting-edge technologies to improve its business operations for greater efficiency, transparency, and customer experience.
According to a 2020 global survey, 75% of banks are investing in developing a more customer-focused business model. Therefore, fintech trends are unfolding and positively impacting the global fintech software development sectors. Additionally, in the United States, 64.0% of millennials and 59.0% of Gen Xers are using a banking application on their smartphones. These fintech software ideas are not only automating but also improving financial services.
Below you can find a list of top Fintech software development sectors that offers useful fintech solutions to upgrade businesses.
Mobile/ Digital Banking
Forbes defines digital banking as ‘accessing banking features and services via your bank’s website from your computer. You may log into your account to check your balance or pay your electricity bill. You can access additional banking features, such as applying for a loan or credit card, at many banks via your online banking portal.’
Furthermore, according to Deloitte digital banking benchmark report, ‘3 billion is the forecasted number of global users that will have access to retail banking services through smartphones, tablets and PCs and smartwatches by 2021. The digital revolution is disrupting the relationship between banks and their clients and new features continuously appear to enhance customer experience.’
The growth of mobile technology has paved the way for the application of fintech in banking. Moreover, technologies like facial and other biometric authentications using AI and ML are adding an extra layer of security to online transactions and to make sure your money reaches the right person and is authenticated by the right person. Besides, some global financial institutions including banks have gone completely digital, reducing unnecessary costs along with providing ease and accessibility to customers. Among other things, fintech development companies are facilitating the progression of fintech in banking institutions with a smooth transition from physical to digital.
According to nim.org, ‘Crowdfunding is a method of raising funds to support a venture, typically by raising small amounts from a large number of investors. This whole process is conducted on an online platform that facilitates interactions between project creators and potential contributors, called backers. Typically, a project creator posts a project on a platform seeking a certain amount of funds for some venture. Potential backers view the project and contribute money if they are convinced of the idea.’
In simpler words, crowdfunding uses digital channels to raise money or for charity. Kickstarter, Indiegogo, Patreon, GoFundMe are some of the most popular examples of crowdfunding platforms. Crowdfunding platforms offer one of the great and easiest ways to raise money online either for personal causes or for public benefit. Crowdfunding is not a new concept but now it has been entirely digitized. Before people used to pool money to help others, now you can reach global audiences through digital channels and contribute to causes.
Digital Insurance or Insurtech
Digital transformation has not only disrupted the banking sector but also the insurance industry. Insurance is one of the most prominent and competitive industries in the world and is seen to be catching up with technology especially in times of the global pandemic. Many fintech software development companies are now helping insurance firms to fill in the gaps with Insurtech for optimal customer experience.
According to KPMG, and I quote, ‘Right across the insurance industry, we are seeing signs of massive and unprecedented progress. Some are exploring new technologies and partnering with Insurtechs and their existing technology partners to develop new models and tools. Others are accelerating their business impacts by executing quick minimum viable products (MVPs) and proof of concepts (POCs) and then straight into production. Many are looking for ways to simply speed up their existing digital roadmaps. And some are exploring new and different outsourcing solutions to drive agility.’
Before making investments like investing in stocks has always been a hassle. You would spend hours on the phone just to get it right and then you would wait. But with investment applications now available, it just takes a few clicks to trade your stocks. Now, even traditional brokerages are making investing easier by offering applications. You can easily find the one that best suits your needs. Robinhood, Acorns, round are some of the most popular examples of investment applications. These fintech applications ensure the survival of brokerage firms in times of instant instability like the Global Pandemic. But it is important to look for any charges while using such applications such as annual fees on your funds and a small percentage of your investment value or additional monthly flat fee etc.
It is another popular trend in fintech software development. Investopedia defines P2P lending as, ‘Peer-to-peer (P2P) lending enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman. Websites that facilitate P2P lending have greatly increased its adoption as an alternative method of financing.P2P lending is also known as “social lending” or “crowdlending.” It has only existed since 2005, but the crowd of competitors already includes Prosper, Lending Club, Peerform, Upstart, and StreetShares.’
Peer-to-peer lending platforms are completely online which results in convenient processing of lending applications and loans. Moreover, using technology matching of lenders and borrowers profiles becomes easier which leads to higher turnaround time. The entire process is simple, all you have to do is fill out the online application, the lender will go through the application and check details for verification and make the final decision. The loan takes as little as 48 hours to get approved, after the loan is approved, the funds are transferred to the borrower’s account. Most importantly, borrowers may get lower interest rates through P2P platforms as compared to banks.