Banks and financial service providers will only be able to assert themselves in the future if they open up partnerships with fintechs to integrate digital technologies and services. But what offers and solutions should be kept in mind? Here are the five fintech trends that you should deal with in 2019.
Streamline data management and usage
So far, decision-makers have been faced with one particular question in the face of the rapidly growing mass of data: where to begin? Most banks still work with many different systems in which their information is stored. Old systems and data, which are available in several places at multiple sites, make strategic use and analysis difficult and time-consuming.
Targeted, comprehensive and sophisticated data handling – whether customer, financial or other business-relevant information – must be a top priority in 2019. Only companies that meet this challenge and use innovative solutions that support them will be able to make processes more sustainable and efficient in the future.
Create new business areas with cloud computing
The banks’ initial skepticism about outsourcing relevant data to the cloud is based on the realization that risk can be controlled based on well thought-out security measures and cooperation with reliable partners. Those who opt for the cloud too late can quickly lose out on competitive strength and business success today.
Digital and young banks have often relied on cloud computing at an early stage, gaining an edge over established financial institutions. These can follow suit – when they can bring new financial services and offerings much faster than before with the help of fintech solutions from the cloud. This increases scalability and flexibility for the entire financial industry.
Detect and ward off fraud
The unstoppable rise of artificial intelligence, data analytics, and the Internet of Things (IoT) will have profound implications in 2019 and beyond for issues such as fraud detection and security. Estimates suggest that around $ 2.1 trillion of the world’s annual damage is fraud. This corresponds to the gross domestic product of Saudi Arabia, Pakistan, Switzerland and Ireland together.
The fight against money laundering alone costs around 83.5 billion US dollars worldwide. Fintech solutions, such as real-time customer audits in global commercial registers, can help banks and financial services companies to mitigate this threat while reducing costs.
Set on biometric authentication, mobile apps and BaaS
Fintech solutions for the fight against fraud and improved financial process security will play an increasingly important role in the future. In order to be competitive and forward-looking, it is essential to be open to new technological approaches. These include mobile apps as well as new authentication approaches. For comparison, the average customer visits his bank branch only about ten times a year, while he uses his bank app 300 times a year.
This year, too, the success of BaaS (Banking as a Service) will continue. Companies that rely on BaaS platforms have a clear competitive advantage. Technologies such as these will help drive digital transformation in the financial industry, reduce fears, better serve customers, and make processes more efficient.
Identify new ways of processing payments
In addition, there will be some new developments in payments in 2019. These include Direct Currency Conversion (DCC), which enables foreign customers to process a credit card payment at the terminal in their local currency, for example. With the help of DCC services, customers know directly how much they spend in their local currency and have full transparency about exchange rates.
The five trends mentioned impressively show which fintech innovations and topics banks and financial service providers should increasingly occupy in the coming months. Closing up on new solutions and approaches can hinder their success and, in the worst case, even their continued existence. Precisely for this reason, cooperation with interesting fintech providers in 2019 is a key prerequisite for forward-looking banks in this highly competitive market, which is affected by many changes.