There is no denying the fact that the finance industry seems to be growing at a pretty fanatic pace. After all, much like every other industry out there, even this one seems to be determined to enhance customer experience and ensure to provide better and smoother financial operations, high-end security (keeping the increasing security breaches in mind) and enhancing overall productivity and efficiency. And that’s where financial software development featuring all the emerging financial tech trends play a crucial role. 

Now I am pretty sure that you all will agree with me when I say after the COVID-19 massive hit, one thing seems to be gaining momentum like never before, i.e. adaptability and innovation. Also, implementing new technologies to gain a competitive edge has never been so important and worth considering. Also, you will come across several companies that tend to offer financial software development services that ensure sure-shot success in no time. Trust me, people have started preparing in a full-fledged manner for the future. Let us explore how? 

If you look at the big picture and take the finance service industry as a whole, it comprises of three broad categories including private, retail and business banking. These aren’t just categories or groups, in fact, they turn out to be the crucial key players that can make or break any finance industry. 

There is no denying the fact that the entire industry including different organizations, and banking sectors are going through a radical shift. So before we proceed further with the emerging technological trends, it’s time to focus on what are the top or the most concerning challenges faced by banking and financial organizations all across the globe. Fortunately, we have financial software development companies ensuring services that can help different organizations to overcome these given challenges. However, let us go through these challenges first. 

Top Challenges Faced by Financial Organizations

#1 Increased Competition

Increasing competition is one of the biggest challenges faced by the financial industry as a whole. Not just large but smaller institutions are found making the most of emerging technological aspects in order to remain competitive for the long run. You see there was a time when we had the option of visiting the local bank even to take a look at the transaction history. Fortunately, that’s not the case anymore, with an increase in digitalization, our banks tend to be at our fingertips via smartphones. 

Moreover, customers have started looking for one-stop shops to take care of all their banking needs. You see during the pandemic hit, it was impossible for these sectors to conduct in-person interaction and that’s when these digital channels were given importance. 

#2 Security

Another top-most challenge faced by the fintech industry was to keep up with high-end security. You see in today’s times security breaches are happening every now and then. You have no idea and your savings can be stolen within a span of minutes. So adding an additional layer of security can definitely minimize the chance of digital fraudsters getting away with your hard-earned money. So security is another factor that must be incorporated with your core technology. However, adding several security layers can offer instant assistance to the vendors making it more difficult for potential fraudsters. 

#3 Lack of Mobile and Tech Expertise

Now this is something you all must be well aware of already. I mean we all have been fortunate enough to witness the massive change. There was a time when most of the finance companies or banks didn’t have proper or convenient mobile banking services. This annoyed and compelled the customers to make a switch to those who did offer some banking services. You see slowly and steadily banks began to replicate websites and then came the era of incorporating mobile applications offering your valued customers more convenient options. And now we have, 

• QR codes to make payments
• Automatic money transfers just by tapping the credit cards
• Two-factor authentication 

Further, without much delay, I would like to mention some of the top tech trends to take a look at in the financial industry. This section is a must not just for financial institutions but for financial software development companies. After all, it is very important for them to keep up with the ongoing trends. 

Emerging Technologies in the Financial Industry

#1 Agile and Adaptive Banking

One of the top and the most popular fintech trends to take a look at is agile and adaptive banking scenarios. Now both the terms agile and adaptive are pretty much similar. It’s all about adapting to different ongoing changes, being competitive and carrying out tasks with great speed and efficiency. All those Financial firms, financial institutions, commercial banks, and insurance businesses that remained flexible have definitely made a mark and will stay afloat at least for the long haul. In fact, Gartner suggests that by the year 2030, 80% of traditional financial institutions won’t even exist.   

So, how can agile methodology be a savior? Well, the answer is pretty simple and straightforward. This particular approach is all about a product-centric model that ensures different organizations to face some critical challenges such as:

• All the unforeseen risks featuring finance-related criminal activities can be well taken care of  
• Lack of remote access  
• Loan and financial planning services segments 

#2 Open Banking

Statista suggests that the concept of open banking will be growing at an average annual rate of nearly 50% from 2020 to 2024. So what exactly is open banking, it refers to the seamless use of APIs especially for sharing financial data and services with third parties. The concept of open banking ensures technological infrastructure and the legal frameworks which enables third-party financial service providers to give open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions. The concept of open banking has changed several aspects such as:

• Addressing the changing customer needs
• Surviving the increased competition
• Modernizing the entire system
• Provide a Single view of accounts across different banks
• Seamless provision of financial management tools
• Tailored products offerings on customized holiday loans based on flight and hotel bookings

Above all, open banking successfully promotes data-sharing practices that assist banks and fintech firms not just to boost the experience of customers but also to stay in sync with the ever-changing rules and regulations. In the present times, customers’ preferences are given more priority. 

#3 Enhanced User Experience

Another interesting trend that seems to have been pretty much on the rise is enhanced user experience. Even in the banking and finance sector, retaining customers is pretty important or else they will switch to your competitors. More and more institutions are striving hard to enhance their digital skills so that they just don’t end up meeting but go a step beyond the expectations of their valued customers. 

One must remember that instead of face-to-face meetings all the time, customers tend to value staying connected via their digital devices. 

#4 Artificial Intelligence and Machine Learning

The next intimidating fintech trend to consider is artificial intelligence and machine learning. There was a time when AI and ML were supposed to be a passing fad but not anymore. They have proven to be a seismic shift across every industry and the fintech realm is no exception. Now you must be wondering what’s the point of AI in the banking sector. With the inception of AI chatbots, a sudden growth of about 104% has been found and this is not just because it provides automation. 

When you incorporate AI and ML technologies, what happens is! 

• Enhanced productivity and amazing operational efficiency
• More and more scope for customization and personalized services
• Use of data in the best possible manner and provide amazing financial services to your valued customers. 
• Improve financial services, credit card services, mobile services, cloud services, and money management.
• Less human intervention and disruption results in enhanced communication and reduced errors. 

#5 Cybersecurity

The banking or financial sector is one where security breaches shouldn’t happen at any cost and unfortunately, it is the only sector where security breaches keep on happening every now and then, leading to the compromising of valuable information of your customers. As a result, cybersecurity is pretty much important for your customers. Take a look at the security breaches that happened over a couple of years, I am sure you will be shocked and it will be a major concern than ever before. More than 40% of businesses believe that fraud happening results in lessening the scope of innovations and most financial institutions don’t expand into new channels. 

You see if you want to simply survive, then cybersecurity must be taken into account. And here I am not talking about optimizing internal procedures but also becoming selective regarding whom to work with and whom not to. All this must be done keeping data security in mind. 

Final Words

And we are done for now! You see the tech realm has definitely given a major impact on different industries across the globe and the financial one is no longer an exception. So in other words, one cannot run away from it. In fact, it’s for the better of everyone. The aforementioned top Five trends will continue to evolve and will be seen redefining industries within a few years down the line. 

So what are you waiting for? Time to get into the nitty-gritty of these trends and get started with them. I hope you did find the following post informative. If so, do share among your peers and help us in reaching more readers. To all the financial players and financial software development companies, this is a huge shout-out for going forward. So ignoring such trends might compel you to fall behind.