Nowadays, the fintech sector is blooming worldwide. According to Statista, the overall transaction value in the fintech domain in the USA alone is predicted to grow at 20.5% and reach a whopping total of $6 billion by 2021. A variety of current options as contactless payments, digital currencies or robo-advisors have become commonplace. And it’s only logical as customers want their transactions to be processed in a comfortable, fast, and secure way. This way, more and more banks and financial institutions think about going digital and join the fintech army.
As a matter of fact, the financial software development service is technologically sophisticated and calls for deep expertise. Pioneer fintech companies (and these may be comparatively low-profile companies like Elinext or TAVIQ) develop technological solutions to streamline processes and enhance customer experience. Let’s consider top 4 directions in fintech software development domain.
Payment and billing software
Payment fintech companies come up with solutions as streamlined POS processing, enhanced risk management, and mobile payments to deliver enhanced customer experience. As of today, there are two major branches of digital payments: mobile payments and B2B payments/cross-border B2B payments.
Thanks to the propagation of mobile wallets and contactless payments services like Apple Pay, Android Pay, and Google Wallet, more and more people are using mobile payments instead of using their credit cards. Besides, using NFC technology and biometrics for the process of authentication facilitates the security concerns. In 2016, the value of B2B cross-border payment market reached $150 trillion, and the number is growing since. The major challenges posed before B2B payments are accuracy, flexibility, and security.
To improve their B2B payment model, financial organizations use the following technologies and solutions:
- Private blockchain platforms are used for security, transparency and real-time money transfer.
- Payment management platforms offer flexibility in choosing among payment methods, payment networks, rate providers, electronic wallets, etc.
- E-invoicing platforms are employed for fast and cost-efficient approvals of the payment processes.
- Mobile b2b payment platforms ensure faster payment, enhanced customer experience, improved reporting and data mining capabilities.
C stands for convenience, especially is the Tech Age we’re living in. No wonder it is expected that more than 60% of the senior population across the globe would bank digitally in 2018. Banking institutions strengthen their online presence by offering digital banking which enables their users to perform the majority of banking operations online.
Just like in the point above, in doing digital banking, they resort to the most innovative technologies such as the face recognition, voice biometrics, and AI – all in the name of convenience. Moreover, due to their digital nature, they are cost-effective and practical to use.
Personal finance management
Personal finance management-oriented companies provide both mobile and web services to help customers handle their finances, income, and expenditures. Typically, the software includes features as the categorization, the visualization of spendings, buying trends, etc. This way, companies may request access to a bank account and open banking API.
Yet the largest part in this domain is taken by robo-advisors. In 2017, the overall value of robo-based transactions hit over $225M. This way, these personal assistants, fully automated and functioning on algorithms, bring new blood to investment advisory services.
It’s worth noting that robo-advisors hold the same legal status as their human fellows. They are registered with the U.S. Securities and Exchange Commission to conduct business, and, thus, they fall under to the same securities laws and regulations as regular brokers do on, say, Wall Street. Their official designation is “Registered Investment Adviser,” or RIA.
The latest statistics from McKinsey & Company indicate that insurtech companies have already embraced the most prominent branches of insurance, putting the stress on the property-casualty business and the process of distribution.
That’s the place where IoT and its opportunities come in handy. The data gathered from sensors, wearables, and connected devices come in the form of initial personalized offers, recommendations, and dynamic pricing schemes. Secondly, the streaming of real-time data allows insurers to manage risks in a more efficient way which, eventually, leads to boosting sales. As a result, a customer gets a handy and cost-efficient policy tailored to his own personal needs. If you’re looking to discover some notable insurtech solutions, try out companies BIMA, BrightHealth or Metromile.