With how quickly technology is advancing in the modern world, innovations of all shapes and sizes are happening every day. In addition to technology itself getting better, these technologies are having more and more impact on various different industries, including banking.
For decades, the banking industry hasn’t had a ton in terms of innovation. Sure, it’s nice to be able to use our phones to send and receive money and such, but true innovation has been lacking in the space for a while.
However, the emergence of FinTech has given the financial and banking industry the innovation it so desperately needed. FinTech hopes to compete with and improve upon the traditional financial services methods we have had in place for so many years.
Despite being a decently new wave of technology, FinTech is a huge industry with many companies and projects popping up to solve a variety of different issues with financial services. In addition to more companies and individuals helping to innovate in the space, consumers are also responding in a positive manner to FinTech. According to an EY survey on FinTech adoption, 33% of those in surveyed markets use at least two different FinTech services and 84% of people are aware of the various FinTech services out there. While everyone is taking part in this FinTech revolution, there is no doubt that millennials have had a big part of this explosion of growth. Millennials are unsurprisingly the people that use FinTech services more than anyone else. Nearly 50% of 25-34 year olds are using FinTech frequently, and do not be shocked to see that number continue to climb in 2018.
So what makes millennials more likely to adopt consumer end FinTech solutions? Experts believe it’s because they don’t have strong or established relationships with banks and have been using technology most of their teenage/adult lives, and are comfortable with the idea of non-traditional types of financial providers.
As the year comes to an end, we thought we would take some time to look at trends such as this and a few more that we’ve seen emerging from the FinTech space.
Financial Firms and Institutions Are Dipping Their Toes into FinTech
Let’s face it, eventually; everyone succumbs to technology that makes their lives easier. There was a time where computers and cell phones were only for techies and now everyone seemingly has at least one of each. Times are changing and large financial institutions aren’t oblivious to that fact. As a result, they are beginning to provide FinTech solutions to their clients so that their clients don’t go elsewhere. This will continue going into 2018 and beyond.
The List of Benefits for Blockchain is Expanding
Just like all types of technology, financial technology is always growing and expanding. There were early pioneers that showed promise and have become household names (such as Mint and Bankrate), but now, there are the next generation of technologies that can go far beyond what the pioneers could. This is partly thanks to things like blockchain technology, as it allows for more efficient, fast, and secure transactions than traditional methods.
Some of the Biggest Companies Are Becoming Involved
If some of the biggest companies on the planet are getting into FinTech, that is usually a pretty good indicator that it is on the rise. Companies such as Apple, Google, Facebook and Amazon have all developed different apps or platforms that make financial services easier, cheaper, faster and more streamlined in nearly every way.
Customer Service and Ease-of-Use Are Big Deals
How easy or straightforward a platform or system is to use will correlate directly to how many people use it and the experiences they have. If a platform is great, but has a ton of friction when it comes to customer service, it will not be successful. Because of this, many FinTech companies and start-ups need to ensure that customer experience and service is considered very early. As the FinTech industry matures, there will be more and more competition, so your user experience and customer service will be a major key to your success.
Another one of the other biggest changes and trends in the financial world (in regards to technology), is the emergence of Robo-Advisor. Robo-Advisor are essentially a class of financial advisors that provide advice or recommendations via complex mathematical algorithms and software. These require very minimal human intervention and are thus quicker, and more efficient both in terms of cost and time. The idea of Robo-Advisor bring services to a wider range of individuals and is a breakthrough in the financial industry.
Here at Cedrus, we are especially interested in this last trend as we recently assisted a very high profile client by building them a Robo-Advisor of their own. The Robo-Advisor was created to be an aid to customer investments and retirement planning. It caters mainly to younger investors and is exclusively available online. With the help of algorithms and a questionnaire, customers are easily and quickly able to open an account.
We’re interested to hear from you on what new innovations you are most looking forward to in 2018. Let us know in the comments section below!