The top 5 technologies set to dominate the FinTech market in 2021

Maria Zotova

Marketing and Public Relations Specialist

21.01.2021
Reading time: 10 min

With the appearance of innovative technologies and business models, the FinTech sector is witnessing rapid growth. The world’s FinTech market is anticipated to rise annually at an average rate of 10% (CAGR), reaching nearly $191.85 million by 2025. Aiming to address industry-specific challenges, companies are employing FinTech software for request processing, risk management, cybersecurity, and process automation. 

During the coronavirus pandemic, banks and financial organisations are building digital solutions to continue successfully delivering services despite imposed lockdowns. 

According to research conducted by deVere Group, the use of financial applications has increased by 72% in Europe due to the COVID-19 outbreak. As people are forced to stay at home, it is crucial to provide them with the ability to make payments, manage assets, and open accounts online.

This article describes how financial and banking institutions can benefit from employing innovative technologies and solutions such as artificial intelligence, big data, chatbots, FinTech mobile and web apps. 

How can FinTech technologies solve business challenges?

1. Artificial intelligence solutions

According to a survey published by ReportLinker in 2020, worldwide AI in the FinTech market is projected to reach $22.6 billion by 2025, growing from $6.67 billion in 2019. A study by the Economist Intelligence Unit (EIU) also found that 86% of financial institutions plan to increase their AI-related investment through 2025.

The need for process automation is one of the key reasons market players turn to FinTech software development companies to create AI-powered applications.

In FinTech, AI can be used for:

  • manual process automation and error minimisation
  • predictive analytics and risk management
  • personalised recommendations and faster decision-making
  • enterprise-grade security enablement

To be more specific on the above-mentioned use cases, organisations can employ FinTech software, powered by AI, to scan documents and improve the time for verifying compliance with the required regulations in trade. Thanks to AI technology, it is possible to not only streamline operations but minimise mistakes by replacing humans with machine learning algorithms.

Financial and banking institutions can build AI-based systems that process massive arrays of data to predict stock fluctuations, prepare trading and investment strategies, estimate and reduce investment risks. 

Another opportunity is to launch a FinTech software platform providing users with personalised recommendations on investment portfolio management and insurance plans. AI-enabled cognitive assistants can improve decision-making by forecasting volatility, analysing the financial, market, and global economic data. 

With machine learning, companies can create customer profiles based on transaction history and in-app behaviour, while also calculating lifetime value. Furthermore, artificial intelligence can be used to enable security that will protect against hacker attacks, malware, viruses, and unauthorised access. AI can analyse user behaviour, detect suspicious activities, identify threats from millions of events, and instantly block malicious actors.

2. Artificial intelligence-based chatbots

An artificial intelligence-based chatbot is a software solution programmed to perform certain actions according to scenarios. With AI chatbots, financial and banking companies can improve client service ensuring user support 24/7. 

AI-powered chatbots can be incorporated in a FinTech app or website to :

  • instantly answer frequently asked questions
  • provide requested information 
  • offer tailored advice
  • transfer complex issues to the necessary department or employee

Unlike people, a bot does not get tired, which allows institutions to minimize human mistakes. Assisting many customers simultaneously, an organisation reduces response waiting time and therefore, boosts user satisfaction.

Analysts at Juniper Research revealed that the operational cost savings from employing chatbots in the banking sector will reach $7.3 billion worldwide by 2023, growing by almost 35x since 2019. With this technology, banks will be able to save 852 million hours in 2023, which is equivalent to about half a million working years.

By incorporating an AI-enabled chatbot, financial institutions can automate inquiry processing. This digital assistant can receive specific issues from website/app visitors and send them to the required specialists, so that it is reviewed as soon as possible.

Thanks to AI-powered chatbots, employees don’t have to spend hours on routine and time-consuming tasks, instead devoting themselves to more important activities. Therefore, a company can save costs and increase staff productivity.

3. Big data analytics software

A big data analytics system is another FinTech software solution that companies should integrate. A platform can capture, store, and process large volumes of raw unstructured data transforming it into valuable information. This data can be collected from various sources—banking and finance apps, websites, reports, surveys, etc.—to make actionable insights. 

For example, an organisation can build custom financial software to:

  • calculate financial indicators
  • conduct a SWOT analysis
  • prepare a business development/continuity strategy
  • estimate customer lifetime value
  • segment the audience and create a detailed customer profile
  • define metrics that have a positive/negative impact on customer loyalty

Employing software solutions, institutions can visualise data on dashboards with alerts, diagrams, and tables, as well as generate comprehensive reports.

Thanks to custom financial software for big data analytics, it is also possible to prevent fraud more effectively. By analysing consumer information, companies can define the behaviour patterns of each user. Therefore, when suspicious activity is detected, customers can be automatically notified about it and asked for confirmation.

4. FinTech mobile apps 

The use of FinTech mobile apps has seen exponential growth over the past years. 

Allowing users to receive services via tech devices at any time and from any place in the world, smartphone solutions help organisations serve more customers, improve loyalty, and increase revenue. 

According to the report conducted by Liftoff and App Annie, the cost of receiving a product download decreased by over 76%. Thus, it is much cheaper to attract new customers with a FinTech mobile app.

To give value to the audience, an organisation can create a smartphone solution for personal finance management that will enable users to:

  • monitor and optimise personal expenses 
  • analyse and plan a budget
  • make online transactions
  • withdraw and replenish funds
  • open a bank account with a few clicks
  • receive personalised consultations provided by a consultant or programmed AI-powered chatbot

Insider Intelligence reports that 79.5% of the survey’s respondents using mobile banking services say that a smartphone is their primary banking channel.

5. Financial web applications

Often, finance management organisations turn to FinTech software development companies to build custom web solutions tailored to their business-specific needs. Such sophisticated FinTech web applications can analyse financial data, prepare detailed reports, and offer accurate information for fast decisions.

With corporate finance management software, it is possible to:

  • process and create invoices
  • plan budgets
  • process tax payments
  • carry out B2B and B2C transactions
  • manage payrolls, revenues, and expenditures
  • estimate and manage financial risks

Using financial web applications, institutions can optimise expenses, improve budget planning, boost employee productivity, automate operations associated with invoice generation and salary calculation.

Final words

While FinTech software development requires investment from business owners and C-level executives, organisations will receive numerous benefits such as enterprise-grade security, client support 24/7, improved staff productivity, increased user satisfaction, cost and time savings. 

Using cutting-edge technologies like artificial intelligence and big data, financial and banking institutions can address various challenges, from processing massive arrays of raw unstructured data to creating personalised messages and protecting against hacker attacks. 

Thanks to mobile and web financial applications, companies can effectively deliver services and generate profit even during the COVID-19 outbreak when people are forced to stay at home to prevent the disease from spreading. Employing machine learning algorithms, it is possible to instantly detect suspicious activities and protect sensitive data against hacker attacks.

To define the technology stack and type of software architecture that will perfectly suit project requirements, many companies rely on the experience of trusted IT firms.

At Eureka, we have been providing FinTech software development services for over 10 years. Our business analysts and engineers dive into client objectives, prepare a software requirements document, as well as choose technologies and architecture to enable product scalability, high availability, and fault-tolerance. 

Focusing on security, we implement data encryption, role-based access control, two-factor authentication, and other essential features. 
Contact us to receive a consultation from software experts.


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