Fintech: the popularity of digital banking in 2021
In recent years, finances have gone through digitalization. The development of online banking, financial technologies, and other services has led to great opportunities for convenience and accessibility for customers. Let’s explore the most important banking and financial technologies trends that became popular in the background of the ongoing COVID-19 pandemic.
All in all, the unpleasant events associated with the pandemic of 2020 accelerated the digitalization process. The pandemic is forcing a huge number of people to use digital banking.
Given that the socially distanced reality is expected to last for some time, financial services can expect the continuation of such trends as integrated online banking and others. But what about other phenomena like Phygital? Can it happen that as the pandemic recedes, offline banking services – in one form or another – will begin to return to the spotlight? Let’s try to figure it out.
Biometric safety systems
Cybersecurity does not lose its importance, but the pandemic COVID-19 has changed the approaches of humanity to protecting information. Fingerprinting is now one of the most popular technologies, but people need new, contactless ways to protect data and recognize their identity. In 2021, the following recognition systems are expected to be popular:
- voice systems;
- vein patterns on the hands;
- and even DNA (they are expected to develop).
Customers’ reliance on the digital ecosystem in 2020 has made accessibility more important than ever. Open Banking in the UK means that account holders now expect more opportunities for integrated access to their accounts. The number of retail customers using open banking products has increased greatly.
Nevertheless, open banking has specific problems, especially in terms of customer perception. This is largely due to the trust and wide access provided to third-party providers.
Despite the open banking products being widespread in 2020, a more transparent approach will be needed to support customer confidence and growth in 2021.
As with open banking, the pandemic has accelerated the development of cloud banking. Speaking about analyzing and storing data, the cloud is perhaps even more important in modernizing core banking systems. Many traditional banks were at a disadvantage during the pandemic, and this is likely to worsen as it continues.
However, there are ways to resolve these issues. The use of APIs and cloud microservices in system architectures can literally do miracles in terms of flexibility and adaptability during rapidly changing situations, such as a pandemic. This allows you to develop faster and more accessible processes. For example, one European bank moved the entire credit card approval process online, eliminating the need for customers to visit a branch.
The concept of the ecosystem is becoming popular: large companies allow users to read news, order taxi, and listen to music without leaving applications. In the financial sphere, developers will also fight for the love of customers. Financial ecosystems for business will combine information about the company’s products, customers, advertising, and profits. This will make it possible to consider the information in a complex and process it in such a way that it is useful for both the business and the client.
The most sought-after areas of ecosystem development are business products (accounting services, payment management, business launch), housing (mortgages, security, housing selection), and public services (fines, services). People try to create products that correspond to these trends.
What will banks look like when the pandemic goes down in history? There is no doubt that convenient, integrated online services will not disappear. But can the lack of social restrictions caused by the pandemic mean that offline banking will return? Phygital has been a trend among banks for some time. Bank branches are no longer just banks: these are cafes, jobs, car dealerships, and much more.
Blockchain technology appeared several years ago, so we have yet to make the maximum use of its capabilities. It helps in data protection, identity identification, company verification, transaction registration, risk management, signing contracts. Such a broad use is possible due to the safety and reliability of technology, so this technology will continue developing in 2021. The most relevant area for fintech is cryptocurrency. Demand is increasing, so the ability to work with cryptocurrencies is relevant for banking applications.
The development of fintech portends an increase in financial literacy and well-being. This will also make many businesses more successful and allow them to manage funds better. Many traditional financial companies want to take on fintech more closely in the next few years, so it is worth starting work in this area now. Our world is changing – that’s the truth we must understand and adapt to it.