Fintech is a rapidly growing industry. It offers both, new solutions to customers and technology for financial institutions. What exactly is fintech? What are the key trends in this industry? Find answers to these and other questions in this paper.
What is fintech?
Fintech is an acronym derived from the English phrase financial technology, which refers to companies that develop digital solutions related to money circulation.
Its main feature is innovation as well as the absence of stationary branches serving customers since fintech operates online and offers digital solutions.
What else is characteristic of fintech companies?
First of all, the fact that most such entities adopt a specific business model based on the provision of one specific service. As a result, fintech successfully operates in the field of mobile payments, online currency exchange, and crowdfunding.
An important and worth mentioning issue, when characterizing fintech companies, are flexible forms of communication with customers, or a perfectly developed User Experience (customer experience) strategy.
As a result, fintech has become real competition for banks, which is due to the fact that they offer solutions tailored to customers’ needs and they are able to modify their offers flexibly in order to match the current market situation.
It is mobility, creativity, and dynamism that are the main assets of fintech, which is increasingly growing in the financial market.
What does the Polish fintech industry look like?
One should be aware that Poland is a local leader in fintech solutions, which is due to the fact that our country is home to the largest number of fintech in Central and Eastern Europe.
Currently, there are more than 300 of them and some of them have achieved international success and, consequently, are highly recognized all over the world.
It is also worth noting that the Polish fintech industry has been growing dynamically, as evidenced by the fact that most Polish fintech was established in the last 3-5 years. What characterizes them? First of all – diversity.
Both in terms of the services offered and the operating model as they are start-ups and enterprises that have grown really extensively.
At this point, it is worth noting that these companies offer services for individual or business customers, but they also provide technologies to banks and other financial institutions.
What’s more, new trends are emerging in the market all the time, determining the development of the industry.
5 key trends in the fintech industry
As already mentioned, the fintech industry has been growing rapidly and new solutions have been systematically implemented and offered to customers. What are the current trends in the industry?
Here are 5 key ones that are sure to influence the future of the finance sector.
Consultants – robots
Fintech companies make efforts to optimize their operating costs. As a result, they use virtual assistants or advisors – bots that are able to guarantee the highest quality of service and a feeling that a user talks to a human.
This is possible due to artificial intelligence as well as machine learning. Big data (processing huge amounts of data) is also proving useful, bots are able to predict future customer behavior and interact with them.
Technology
Providing technology to financial institutions belonging to the banking sector is also an important trend in the fintech industry.
Both parties benefit from this as fintech can implement and develop cutting-edge solutions, and large institutions can implement them into their systems using APIs.
As a result, the offer expands to include innovative services, a trend confirmed by experts of X Open Hub, a fintech that provides technology to more than 100 companies in 30 countries around the world.
Fintech solutions in the B2B model have also gained popularity in recent years. Why?
B2B start-ups significantly accelerate the development of financial architectures of larger enterprises, frequently enabling combining innovative services with existing IT structures in an efficient and secure way due to the APIs.
Comment by Sylwester Jezierski, Marketing Manager in X Open Hub.
Embedded banking
One of the most significant trends in the fintech industry at the moment is embedded banking, which is a solution meaning additional banking or insurance services and products offered by companies whose core business is based on something completely different.
As a result, they can gain a new source of income, as well as promote customer loyalty to a particular brand.
As a rule, these companies work precisely with Fintechs, which creates specific solutions for them and supports them in the way of offering such services to customers.
Automation of processes
Fintechs are also working to automate business processes in the financial industry, examples of which include payment monitoring, pre-approval of loan applications, or any other repetitive processes.
This translates into lower business costs and improved organizational efficiency. It is also worth noting that process automation is now a necessity to remain competitive.
Voice payments
Implementation and development of voice assistants are also proving their worth in the financial industry.
Using a smartphone and voice-controlled services a customer can make payments and check his/her account balance or make traditional wire transfers.
At this point, it is worth noting that this is not only a convenient solution but also a great convenience for blind people, who thus are no longer socially excluded.
In conclusion, it should be said that the most popular current trends in the fintech industry will certainly stay with us for a long time.
This is due to the fact that they are solutions that allow not only the development of financial services but also can pose a basis for cooperation between Fintechs and the banking sector.