Fintech Software Development: Industry Trends
The area of software development that is currently in the greatest demand is financial technology, or fintech. Almost everyone interacts with finances and transactions on a daily basis, and inventive minds can think of many ways to improve these interactions. Like many other types of solutions in the contemporary world, solutions to people’s financial needs can be provided through software.
An overview of current fintech trends is presented below, showing how varied and opportunity-rich the industry is. The overview can serve as a source of motivation for anyone considering a fintech investment or starting a fintech-related business.
The most crucial step, however, is beginning. You can develop a fintech app with the right fintech software development services that will help your business stay competitive in a rapidly changing field.
Let’s dig a little deeper into the fintech industry and look at the trends that are currently influencing the way software is developed.
Use machine learning and AI
According to Autonomous Research, artificial intelligence would help the banking and finance sectors to reduce their costs by 22% by 2023. How? Nothing is complicated.
Platforms supported by AI and machine learning prevent companies from engaging in illicit account access. Additionally, both systems support the analysis of large data sets to troubleshoot problems and come to defensible conclusions.
FinTech applications using biometrics
When using biometric identification for online payments, facial recognition and fingerprint verification are the most appropriate.
About 1 billion smartphones will have some type of face unlock in the next few years, as Counterpoint predicted in its white paper. Facial recognition and fingerprint verification, initially used to unlock phones, are now commonly used to access mobile apps and make in-person NFC payments using mobile devices.
Biometrics give consumers complete control over their finances and personal information and are difficult to tamper with. Moreover, compared to other means, it is the cheapest and it has high accuracy.
Transparency and information security are key blockchain principles. Based on a distributed database, each participant can bring a new record but cannot modify previous blocks of data. It promotes reliable connections between customers and service providers.
Access big data
It is believed that quintillions of bits of data are collected every day from millions of devices. Fintech companies use Big Data to extract insights from raw data. It facilitates the formulation of successful marketing strategies and business development prospects by providing analytical insights into consumer behavior.
P2P (Peer-to-Peer) lending
Credit unions, microloans, market loans and peer-to-peer (P2P) loans are the most popular types of alternative financing.
Three parties are involved in P2P lending, a special type of alternative lending technology, including a borrower, an investor, and a third-party online platform. The basis for the interaction is provided by the third-party platform. As a result, the investor can lend money to the borrower without the intervention of a bank. Since peer-to-peer lending platforms do not hold the loans themselves, they are cheaper and offer better value.
Buy now, pay later (BNPL)
Buy Now, Pay Later (BNPL) is another type of short-term financing that allows future payment for goods or services. It often works without interest, making it a popular type of financing. Customers who use point-of-sale installment loans make a down payment on an item and then pay the remaining balance later.
The BNPL industry is expected to flourish and large international companies are already embracing this fintech trend.
New developments to meet growing customer demands are introduced every year. To be relevant and competitive, it is crucial that business owners and leaders understand where fintech is today and where it is going.