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The financial technology (fintech) industry is one of the most well-funded industries right now. In fact, in 2021, VCs invested a record-breaking $87.2 billion into fintech (Pitchbook, 2022). This astonishing number shows the growing demand and how much value it can have for banks.
Innovation in the financial services field has been ongoing for many decades and recently, has powered forward even faster, thanks to the challenges the global market faced after the global financial crisis (GFC) in 2007-2008. Further, the COVID-19 pandemic shifted buyers’ spending habits, causing shoppers and sellers to rely more heavily on handling finances online and through mobile apps. This in turn has seen the adoption of digital financial products and services rise, and now, mobile payment methods, digital banking, and online lending are commonplace.
Today, fintech partnerships continue to be a great opportunity for banks to modernize their business from all ends, enabling them to create better products for their customers and boost competition.
And these are the three fintech trends our analysts are watching:
#1: Fraud prevention & cyber security
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Digital threats are becoming more and more sophisticated, leaving your customers and business vulnerable. In 2023, fraud prevention and cyber security technology will help you keep up with the threats, and take care of them before they become a bigger problem.
How this could help your business
Technology will help reduce cases of identity theft and fraud without putting your customers on high alert (and creating unnecessary panic!), thanks to internal mechanisms that deal with threats before your customers even notice they’re happening. Also, advanced technology will make your security infrastructure more resilient, helping you avoid cyber attacks that could have a high financial cost. Add to this the ability to reduce false alarms to create better trust with your customers.
What fraud prevention & cyber security solutions look like
These technologies can create continuous identity authentication for sensitive actions in a more convenient way for your customers. Also, with AI-driven transaction monitoring, you can identify any unusual activity that comes from customers or is caused internally, like duplicate charges. Finally, media tampering analysis solutions will let you identify forgery through digital fingerprints within fake documents, images, and videos, a game-changer in ensuring your customers’ accounts stay secure.
#2: Digital services & support
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Trust and relationship building are really important parts of keeping your customers. This means you need to offer them a friendlier experience and let them self-serve wherever possible. Tech-driven solutions are being designed to help your customers do exactly that, in your website and apps, which creates delight and reduces the need for customer support to help with simple issues and sales representatives in support requests.
How this could help your business
A lot of what your customer support team does is repetitive, answering the same questions and giving the same info over and over again. With an automated solution or virtual assistant that lets customers find their own answers, your support team will be able to spend more time on performance boosting, which of course reduces your OpEx. Additionally, customers who have a good experience on your app or website, or when they interact with your customer support, will be happier and this means they won’t be looking for another service provider.
What digital services & support solutions look like
We’re already seeing the positive impact that conversational AI solutions are having on customers. They make customer support protocols accessible through a self-served experience that feels like a natural conversation. Data collection modules use that conversational AI solution to seamlessly receive customer information and update it in your internal systems. And with Customer Service Management platforms, you have a centralized hub to see open requests from customers whether they come from your website, smartphone app, Facebook page, in-branch requests, and more.
#3: Data-driven banking
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Data is a buzzword in this industry for a good reason: its potential is endless. Banks and financial institutions process tons of data every second from many different sources - all to give their customers a more personalized and better experience. And technology has a big role to play in making that happen.
How this could help your business
Technology analyzes, categorizes, and creates insights from data much faster than any human individual could. And for you, that means you can advance your service utilization, up-selling, self-service, and brand loyalty with more accurate forecasts while reducing the risks of debt-related liabilities. Also, with more accurate data, you can create more meaningful customer relationships and understand what affects your customers on an individual level.
What data-driven banking solutions look like
There are so many ways to utilize existing data sources for the benefit of services and operations, from customer journey analysis and management to risk analysis and underwriting automation. Among the most interesting solutions we'll see this year are dynamic pricing engines and product lifecycle management tools. These will give you more control over product pricing in your business’s portfolio while analyzing demand for every product as the year moves forward.
A few final words
The year is just getting started and that means more trends are on the way. Keeping your banking business on top of them is vital.
At SOSA, we globally source and validate startups for the financial sector, ensuring your innovation team finds exactly the technologies that directly impact the bottom line. We don’t just find you the best-fit technologies for your business, but also take you to the finish line with pilots, implementations, or investments.
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