From tailoring investment services that are available at the palm of your hands, to concocting viral marketing campaigns aimed to attract new customers, the industry continues to evolve every day.
As governments all around the world have retained control of the spread of COVID-19, congruence has been reached. Innovation of financial technologies will continue to transform for its own sake, and not at the duress of pandemic provocations.
Our reliance on digital self-service banking, be it for payments to merchants or requesting approval of a loan, has set a requirement for banks (and merchants) to become flexible. Businesses are driven to appease the needs of their clienteles, and would be able to do so through a variety of ways in the future:
1. Banking-as-a-Service (BaaS)
BaaS platforms allow businesses to embed financial services to offer loans or payment services to their customers. Brands that have adopted embedded financial services on their platforms benefit from providing better consumer experience: making transactions effortless and pleasant.
Westpac Australia, for instance, partnered with 10x and Amazon Web Services to offer digital banking products through a network of partners and deliver services beyond banking. The scalable platform allows merchants, big or small, to navigate and harness customer trends, market conditions and regulatory requirements.
The uses of BaaS platforms vary. For banks, partnerships with merchants increase their sources of revenue, provide a cost-saving initiative and retrieve better customer insights. For businesses who adopt the technology, BaaS platforms allow them to reach a wider audience and ensure safety of providing credits by way of verification.
2. Real-time Payments
There was and still is a demand for the immediacy of payment settlements globally. Cross-border payments will certainly be the ‘next big thing’, allowing businesses to grow much faster in an era of technological advancements.
All across the world, governments and tech-giants alike have begun the search for a safe and reliable system to allow for this. Not only will stakeholders enjoy greater efficiencies in cash flows, but also expand on relationships all across the globe.
Nexus from Singapore, for instance, is a blueprint that connects cross border payments to happen as quickly as sending a text message. Devised by the Bank for International Settlements Innovation Hub Singapore (BIS Singapore) and the Monetary Authority of Singapore (MAS), Nexus is currently at its experimental stage: simulating payments between Singapore, Malaysia and the euro area.
3. Artificial Intelligence & Machine Learning (AI/ML)
AI/ML technology allows its users to process large amounts of data sets and transform them into valuable information. Such technology can be customised to provide essential insights to provide efficiency and enable informed decision making.
In the world of finances, AI and ML are able to effectively minimise risks by way of fraud detection, automating loan approvals, conducting background checks and creating predictive models. These technologies are constantly improving, and fintech will be one of the industries that continue to benefit from it.
These trends will accelerate the development of the financial industry and will continuously evolve to meet consumer expectations. They create global opportunities for banks, fintech providers, businesses and end customers alike to offer better payments, lending, digital banking, and more.