It appears that the days when having to present financial documents and wait for approval just to apply for a loan are passé. All you need now is your smartphone, the lender’s app, and you’re set to submit the requirements and receive loan funding for your financial needs with just a few taps on the screen, all in real time.

As technology advances by leaps and bounds, so do business processes across many industries. And in the convoluted world of finance, technology is revolutionizing how money is being handled. Now, the FinTech industry is opening doors to a wide array of services that make it convenient to complete various transactions, which is the reason why it’s growing at a fast rate.

According to a Statista report, bank spending on new tech in the US was expected to hit US$17 billion in 2015 and reach US$19.9 billion in 2017. But on a global scale, the investment value in FinTech companies reached around US$31.4 billion in 2017, which went down from its US$47 billion peak amount in 2015. Additionally, the annual venture capital investment in FinTech companies showed an increase from US$1.89 in 2010 to US$27.45 billion in 2017.

The global growth of FinTech largely depends on its individual markets. Currently, the most popular location for FinTech startups is in the Americas. But, the FinTech adoption rates in various financial sectors such as borrowing and savings shows US consumers fell behind compared to other countries such as Brazil, China, and India.

Unsurprisingly, FinTech continues to make massive waves across the financial sector since it benefits both consumers and their country’s economic development. It has been helping save time when performing transactions while making it a lot safer to do them. The availability of alternative finance and the rise of mobile payments have also taken convenience to a whole new level. This has even led to the growth of online lending in the Philippines and in other neighboring countries.

For a more in-depth look into the world of FinTech, here’s an informative infographic that dives into the current trends that will shape its future:

1. AI adoption for voice technology

Artificial intelligence has been the talk of the town in the tech world with its application in a variety of consumer products, such as smart speakers and smartphone digital assistants that both feature voice technology. This is starting to be fairly common in the customer service department, too. AI for voice is also expected to dominate the FinTech industry in innovative ways.

There are banks that already use this technology to service their customers. For now, it’s fairly limited to tasks such as finding out the basic details about your last couple of transactions. But with applicable advancements in voice technology, more complex tasks are expected to be added to its features.

Oversea-Chinese Banking Corporation (OCBC) recently teamed up with Google to launch its first AI-powered banking service in Singapore. This will allow customers to engage the AI in a conversation about banking services that include the calculation of loan interests, the planning of future savings, when getting updated with the latest financial market reports, and when searching for the nearest ATM or branch.

There is still a lot of progress to be made. But as AI technology advances, it adds other banking services to the mix to deliver a more seamless customer experience.

 

2. Mobile banking and lending

The age of smartphones has sparked a lot of tech trends, and two of the niftiest that FinTech has produced are mobile banking and online lending. These two services are revolutionizing banking processes and modernizing loans respectively.

You don’t have to travel, fall in line, and wait just to be able to transact with banks since they now have their own app where you can access their banking services. Here, you’ll be able to check your balance and monitor your transaction history even while on the go. You can also transfer funds and pay bills through the app. This removes physical queuing from your banking experience and is substituted with just a few taps on the screen of your phone.

There are banks that have also integrated online shopping into their app so their customers have both seamless banking and online shopping experiences in one go. Pretty soon, they’ll be able to include more features outside of basic banking services.

The emergence of online lending has given rise to a different kind of convenience targeted to those who need quick cash. FinTech companies, such as Cashalo in the Philippines, offer their lending service either through a website or an app, where those who are in need can get fast and easy approval with minimal requirements, so they can avail of a loan in relatively small amounts. This allows them to pay these loans without much financial difficulty with less risk to the lender.

 

3. The growth of blockchain

When blockchain technology burst into the scene through cryptocurrency, it rocked the financial sector by changing the way we do monetary transactions. Over time, blockchain has been slowly taking over the traditional banking system due to a number of reasons, and one of them is the reduction of paperwork.

As you know by now, blockchain works as a ledger where transactions are recorded. These records cannot be changed or altered in any way, providing a more transparent and secure way to perform transactions.

With blockchain entering the scene, wire and transfer fees have been greatly reduced through cryptocurrency transactions. Since then, clearing and settlements have become easier to accomplish, loans and credit applications can be availed instantly, and consumers are allowed immediate access to the funds they need.

Simply put, blockchain is an efficient piece of tech. In fact, it has created a movement that’s so powerful that 90% of major banks in the US and Europe are exploring the use of the tech for making payments. An IBM study even predicted that 65% of surveyed banks would have adopted blockchain by 2019.

 

4. Smart collaboration

With constant advancements in tech, big banks are pressured to innovate while start-ups struggle to navigate through the regulations and build their customer base. A collaboration between the two only makes sense, giving them a win-win scenario if they help one another address their concerns.

A perfect example is MasterCard’s Start Path program. It puts a late-stage start-up through a six-month program before they collaborate, helping the new company to scale and boost its profit. This smart collaboration program has already helped develop some exceptional products such as smartphones that could be converted to become secure contactless payment terminals. One example is Mobeewave, a bank that you can have in your pocket to make online payments with Revolut, and execute payments through social networks with PayKey.

The collaboration helps MasterCard as much as the start-ups themselves through (1) learning what’s going on in the market, (2) finding opportunities to build together by introducing products to the market, and most importantly, (3) opening up the company’s ecosystem to deliver the best available products and solutions to its customers.

Collaboration is emerging to be the best way to deliver new customer-focused tech quickly across virtually all industries, and this should continue to develop in the coming years.

 

5. Biometric technology to enhance security

The digital age has made security an issue in the finance sector with all the cyber-attacks and identity theft perpetually challenging financial institutions. Since security is a top priority in the finance industry, it is even more crucial for FinTech.

The use of biometric technology has, therefore, been adopted to protect the institutions themselves and their customers. Its integration will also deliver faster authentication, bringing much-needed relief to customers. This means you no longer have to remember complex passwords or even worry you’ve failed to remember them.

There’s a growing number of banks that have begun using a biometrics authentication process through your smartphone. The camera is capable of iris scanning and facial recognition while the phone’s built-in fingerprint scanner can confirm your identity.

 

6. The efficiency of automation

Automation controlled by AI is already being used by banks to boost efficiency. In fact, McKinsey has found that the second wave of automation and AI is set to be integrated in the next few years, rendering machines to perform 10 to 25% of banking tasks.

This new process will help improve efficiency while reducing human-related errors. Moreover, this will give employees an opportunity to work on more complex tasks that only the human brain has the ability to successfully complete.

---

FinTech is Growing Quicker Than You Think

FinTech has indeed introduced many conveniences not only in the banking process but in the finance industry in general. Innovations have bridged the gap, making it easier for customers who need funds to have access to many financial services such as online banking and Cashalo’s online lending service.

With more technological advancements set to improve existing services and potentially introduce more innovative processes, FinTech is expected to grow in the coming years. This is great for the industry as more companies that are open to change deliver increasingly convenient services and boost their customer base. This is a win-win situation both for the industry in general and all the clients acquiring financial services.