- Fintech aims to make the service delivery easy, quick and secure by using advanced technological tools
- The size of the British fintech industry in 2019 was £7 billion, equivalent to about 11 per cent of the global market fintech share.
- To overcome the pandemic, the fintech industry need to strengthen their existing partnerships and explore new ones to service businesses and consumers better with tailored-made products and unique marketing initiatives
- Top trends reshaping the fintech industry includes RegTech, artificial intelligence, machine learning, Internet of things, blockchain, robotic processes automation, and chatbots
The UK has emerged as a global leader in the Fintech sector, with London being at the forefront for innovations. It has made the financial service delivery easy, quick and secure by using advanced technological tools. In 2019, the size of the British fintech industry was £7 billion, near about 11 per cent of the global fintech industry.
According to a report from Innovate Finance, the fintech space has generated considerable interest from the investors, and the UK was ranked second in the global ranking for venture capital investment in 2019, with the US topping the list. In 2019, US$4.9 billion were raised by the UK fintech industry, an increase of 36% from US$3.6 billion raised in 2018. This was against the backdrop when global investment in the fintech industry contracted by 28% to US$ 35.7 billion in 2019.
The road ahead for fintech in Covid era
While there has been an emphasis on fintech since long, the outbreak of Coronavirus has made the evolution fast and urgent. Covid-19 has led to a pick-up in technological adoption across the globe, with people relying more on the technology to get their jobs done, be it e-commerce, online banking, business meetings or key policy decisions. Changing consumer behaviour and increasing rate of tech adoption is more likely to continue, and with the rising demand for technology solutions for everyday requirements, new innovations will keep emerging every day.
Future’s top trends for the fintech industry
Fintech has seen a widespread usage and increasing popularity of mobile-based payments, cryptocurrency, online lending, crowdfunding platforms, automated investment advisor etc.
This space is constantly evolving, and several established fintech companies, as well as new start-ups, keeps coming with innovative projects to provide business solutions. If we talk about the trends in the industry for the future, then -
Regulatory technology is likely to be most in demand, being simpler, faster, and economical this technology helps in controlling a huge set of data. It connects the financial institutions, regulators, and consumers while protecting everyone’s interest. This space is fast-growing, and many start-ups are entering this space.
Artificial intelligence (AI) has gained popularity in many industries, and its usage in the fintech industry has increased many folds in a span of just five years, especially in the field of analytics. Adoption of AI and other machine learning (ML) tools to identify and prevent frauds, manage risk, and timely reporting of such instances is already prevalent in many financial institutions, and in the present context has gained much more importance than before.
Blockchain has huge potential and has been used by many banks for the purpose of financial transactions. Banks have already benefitted by using this technology, and there is a steady growth in new users with every passing day
Robotic Process Automation helps reducing burden off the human resource to make them available for more strategic aspects of work, leaving mundane work with the robots. Financial institutions can use robotic processes automation (RPA) to complete the task via GUI (Graphical User Interface) and complete work like sending emails, creating charts, maintaining presentation, create a report or organizing a database.
Chatbots had gained their popularity during the present crisis when businesses were maintaining social distancing while operating remotely with a handful of staff. It has completely changed the conventional way of interacting with customers. It is being used in financial institutions more frequently for activities like registration processes, making a transaction, helping with loan related queries, or placing a deposit.
To sum up, the unprecedented situation faced in the form of COVID-19 pandemic has led the businesses to become more creative than ever and economies more self-reliant. Given a level of advantage fintech has over the traditional form of banking, the industry has huge potential to increase market share in current times, especially when technological adoption is on the rise. The finance industry has been facing various challenges, especially with an unpredictable situation like Covid-19 and innovative solutions from fintech can help the business to survive and thrive in these difficult times.
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