The proliferation of the Fintech app development is a breakthrough for the global banking space. Observing the biggest Fintech deal from Europe, the Middle East, & Africa in 2021, market enthusiasts are willing to discuss the impact of ‘Finance plus technology’ on the diverse horizons of the marketplace.
Fintech is not a term that needs any introduction to the millennials. The majority of ventures in the current market are adding to the global investments of around $112 billion.
Aren’t these stats interesting enough to draw your attention to the impact of Fintech on the banking world?
As per Statista’s report, the global revenue share of the Fintech industry grew exponentially to reach 92 billion euros in 2019. Experts predict a steady growth of the Fintech market at an annual rate of 12 percent that will further contribute to generating 188 billion euros by the end of the year 2024.
These stats reflect the superiority of Fintech over other modes of automating our finance & banking facilities. Let’s find out how digital technology is shaping the future of Fintech, particularly in the banking sector.
Fintech app development in a nutshell
- Smart Chip Technology For Security
- Biometric sensors for user identification – Online Transactions for convenient payments
- Chatbots for customer service
- Branchless banking for multiple services
When Finance & Technology collaborate to frame a new innovation in financial & banking services , we call it ‘FinTech’ in our technical terms.
From banks to financial institutions, there is a huge count of fintech segments emerging around to make the most out of digital technologies in the form of online banking, mobile payments, crypto trading, financial management, data analytics, management, & much more.
In earlier days, banks & finance institutions used to count on Fintech solutions to boost their back-end systems but now the scenario is entirely different. At present, more & more Fintech organizations & startups are taking over the edge by introducing modern finance apps for stock trading, fund management, insurance payments, food ordering, & more.
As per a study, approx 84% of Americans rely on Fintech to manage their finances. Furthermore, most of them use at least 2-3 finance apps for banking purposes. The study also reveals that the rapid evolution of FinTech can be a threat to traditional or offline banking facilities.
Key pointers Justifying the Impact of Fintech app development on banking
What’s more secure, simpler, & faster than digital banking in the present time? And the obvious answer is Fintech. In the world of tech-friendly users, fintech sailes through various alterations arising in the finance, banking, & insurance industries.
While people continue switching to online banking modes, Fintech app development is a way ahead to empower banking firms with advanced options to automate banking operations. Gone are those days when customers used to depend on traditional banking facilities that were not much satisfying & convenient.
Over 69% of the global population access Fintech apps at least a fewer times a day. In fact, those having no bank accounts are using such apps to meet their day-to-day financial needs.
Needless to say, Fintech is an all-in-one option to boost financial operations.
Just scroll down to the next section to see how the impact of Fintech in transforming our banking sector.
1. Smart Chip Technology For Security
Security is a topmost priority of every banking firm. It’s more satisfying to know how the future of Fintech can thrive under the risks & regulatory compliance.
We’ve got ample alternatives to strengthen security systems & smart chip technology is one of them. Smart chip ATM cards are not new in trend. Users with such ATM cards can only transact with a one-time password for each transaction.
Unlike other basic ATM cards that use magnetic stripe technology to enable the same pin for all transaction. Smart chip ATM cards are integrated with EMV technology that automatically generates a unique OTP for each transaction.
Hence, smart chip technology nullifies the risks of financial loss & mishaps. In fact, most banks & financial institutions are leveraging KYC verification APIs to enhance security for Fintech startups.
With reduced hassles & security risks, the arrival of smart chip technology is a thrilling innovation to mark the impact.
2. Biometric sensors for user identification
The outburst of Fintech app development in banking has shaped numerous innovations to upscale its operations. Biometrics sensors are one such technology that combines with advanced iris scanners to provide multi-layer security.
Biometric sensors are way more progressive than smart chip technology eliminating the necessity to use a plastic card & remember a particular pin for each transaction.
Right from facilitating a convenient & easy way to the transaction, the integration of biometrics brings a securer way to access your account & personal details without having to put your password every time. Almost every Fintech app is featuring a biometric setup to simply log in to your bank accounts by presenting your authenticity using a fingerprint scanner, palms, eye, & face recognition features.
The user identification is highly secure, accurate, & comparatively faster on apps embedded with biometric sensors. It’s more hassle-less to simply put your finger & access your account at the last minute.
3. Online Transactions for convenient payments
The impact of Fintech on the banking industry is yet again witnessed with the adoption of an advanced payment system across the entire nation in the early 1980s. Monetary control act (MCA) was brought to light to synchronize the operations of private banking organizations & Federal Reserve.
Here comes the involvement of Automated Clearing House in processing seamless electronic payments for salary, dividend payments, bill payments, insurance premiums, & all sorts of payments for utility bills.
According to a report stated by The Federal Reserve in 2016, the total number of 3362 million online transactions were recorded in the year 2015 which is thrice the count of transactions processed in 2012.
In a similar way, the no. of debit/credit card transactions surged to grow from 2.1 million in 2012 to 270 million in 2015. An increase of 90% in debit card users was also observed in the same period. As a result, there was an abrupt increase in the no. of payments redirected from other merchant sites as well. Online transactions observe a high volume of transactions through online banking apps like Revolut.
Interested in development of fintech app? Get our online banking app development guide to get one like Revolut.
4. Chatbots for customer service
The collaboration of chatbots with FinTech has garnered immense popularity over the past few years. These customer service chatbots are more like software that use machine learning technology & natural language processing to render human-like interactions to the users. conversational AI & its use cases is quite popular among banking folks.
One more example of a chatbot to discuss here is Japan’s reputed bank that assists customers to collect the desired information or query-related answer on their site. No doubt, these chatbots have become an imperative part of the banking system dedicated to ensuring customer satisfaction under the supervision of client support executives who’re ’available 24/7
5. Branchless banking for multiple services
Fintech is a path-breaking innovation for the entire banking system. Banks that leverage brand-specific processes to run their digital channels such as social, online, website, & mobile are greatly dependent on Fintech to conduct omnichannel banking on the go.
The impact of Fintech on the banking sector comes up with banks shifting to omnichannel banking to reduce their branches. Take a moment to read out our step-by-step guide to Fintech app development.
How Hie HQ can help in transforming your Fintech business?
Fintech app development is booming around the world, specifically in banking & it’s not fair to neglect its potential anyways. If you’re the one who wants to invest in Fintech apps or have any ideas to add your innovation then Hie HQ is here to guide you.
We’re spearheading with our expertise in product innovation, be it simple or highly complex, and we ensure to get it shipped to you within a matter of weeks. AT Hie HQ, our dedicated product engineers are committed to meeting the quality standards of every product they co-build with our clients. Our industry-specific services are driven by our startup-centric approach empowers us to shape world-class products to help startups, SMEs, & growing businesses with digital excellence.
Interested to know more about us & our services? Contact us today.
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1. Will the impact of Fintech replace traditional banks in future?
Yes, it’s possible. Fintech startups are replacing traditional banking systems soon after every year. The emergence of neobanks, NFTs, DeFi, various Blockchain innovations indicate the gradual shift from physical banking to digital banks.
2. Is it worth investing in Fintech over banks?
Fintech solutions have become more accessible & easier to access these days. In the post-pandemic era, people avoid physical banks over digital modes of banking, stock trading, budgeting, & other services. We can see the market migrating to digital platforms & hence, it’s worth investing in Fintech solutions.
Fintech is not a term that needs any introduction to the millennials.