Fintech is changing the way that companies do business across the globe. As the industry develops, new trends are emerging that make the customer experience ever more streamlined and efficient. This is helping businesses grow faster as they grow their customer bases.
In the following sections, we will provide an overview of some of the biggest trends in the fintech world currently. We will also describe the benefits that companies are gaining by providing these tools to customers.
Key Technological Trends Shaping Customer Experience
There are several major trends that are changing the way that companies do business and enhancing the customer experience. Fintech tools allow for easy and secure payment mechanisms, more accessible banking options, and integration with diverse platforms.
Streamlined Customer Financing
Customer financing is allowing companies to build their customer bases at much-increased rates as financing options allow customers to pay for large purchases gradually over a period of time. Companies that offer customer financing provide multiple options for payback mechanisms to suit different people’s needs.
Customer financing allows companies to grow their businesses rapidly by gaining customers who haven’t traditionally had the means to pay for large purchases. Thanks to advancements in fintech, payment systems are automated and personalized for individual users.
Embedded Finance
Embedded finance refers to banking services that are integrated into non-financial apps and services. The practice merges diverse areas such as lending, insurance, and investment services together in single platforms for customer usage. Combinations of these services function through a common application programming interface (API).
The development of embedded finance has helped streamline the customer experience by making services more accessible and easier to use. Rather than being redirected to a separate banking app, customers can pay for goods or services directly on the service pages of providers.
Open Banking
Open banking is a practice that allows banks and outside service providers to share financial data through APIs. Whereas banks previously kept this data closed within their own systems, sharing with other providers has allowed for the creation of new financial products.
Examples of open banking include:
- payment initiation services, which allow retailers to initiate payments directly from customers’ bank accounts
- account aggregation, which allows wealth management companies to gather customer data from diverse sources and streamline processes
- automated budgeting, which gives customers smart expanse management systems.
New Cryptocurrency Innovations
Cryptocurrency is no longer new, but it continues to innovate on a yearly basis and offer new products. Fintech trends in 2024 include the increasing willingness of traditional card networks to include cryptocurrencies in their payment mechanisms.
Cryptocurrency exchanges are becoming more widespread, and the more reputable exchanges are ensuring compliance with regulations. There is an increasing acceptance of crypto on a societal level as people become more confident in crypto’s stability. Numerous central banks have either already adopted national digital currencies, or are in the process of developing them.
Enhancing Customer Engagement
Because fintech products are more user-friendly than traditional banks and offer greater degrees of personalization, these products are vastly raising customer engagement levels for the companies that utilize them.
AI and Improved Personalization
To improve fintech tools, AI can gather vast amounts of information on both individuals and industry trends, and AI-driven tools use this information to provide tailored interactions with customers.
This increased personalization improves customer engagement levels because customers are much more likely to engage with companies that customize their messages to individual needs.
Tailored Recommendations
Fintech tools provide tailored recommendations to customers. Companies can use their catalogs to make customer recommendations based on past customer actions. If an insurance company utilizes fintech in its operations, it can auto-generate a call recommendation based on customer browsing. It can suggest forms to fill out for customers to receive more information, or add an additional service to a customer’s existing package.
When a customer purchases a new credit card, fintech tools can automatically sync with the customer’s personal data to provide personalized special offers. Credit card companies can suggest additional services that customers might add to their packages, such as special benefits cards. Updates are more targeted as companies can automatically direct relevant information to the right people.
Future Outlook
In the future, these trends will continue to grow in new directions. Fintech tools will become even more personalized, blockchain will become further developed, and open banking possibilities will become more diverse.
Regtech
In the future, the fintech industry will become much more intertwined with regulatory technology to ensure that fintech products comply with regulations. As part of regtech, tools will automate the process of tracking regulatory changes and stay in compliance. Regtech will also simplify customer onboarding by automating the process of identity verification.
Insurtech
Insurance technology, or “insurtech,” will make insurance easier and more personalized for customers. Insurtech uses big data analytics to personalize insurance policies and automate the processing of claims. Insurtech companies are increasingly using role-based access control, which allows individual parties to access those aspects of accounts that are relevant to their role. This increases security and gives customers greater confidence. The number of insurtech companies is growing at a rapid pace and is expected to be widespread in the next few years.
Neobanking
Neobanking is digital banking that works exclusively online without the use of intermediary institutions. It is becoming a preferable banking option for many people who want to bypass traditional banks. Neobanks offer savings and checking accounts, loans, and money transfers. Some include features such as banking without fees, early direct deposits, and even more complex financial products like student loan refinancing and personalized budgeting functions.
Conclusion
Fintech is changing the way we conduct financial transactions, and it is continuing to evolve as there are new products and more advanced mechanisms driving fintech products with each passing year.
This trend will continue into the future. Fintech products will continue to become more personalized, easier to access, and more widespread. Confidence in fintech will also increase as companies will be in greater compliance with national and international regulations.
