The year 2017 saw a surge in cryptocurrencies and Blockchain, that converted the technology and its most popular use case today- Bitcoin, from just an ignored obsession to a mainstream major Fintech player.
The way Bitcoin raised from nothing to a market value of $10,000 per token was an alarm for some and an expected trend for others. This is one of the hottest trends for 2018, amongst many others.
1. Blockchain enters well into the mainstream
While Blockchain was initially developed as a means to secure cryptocurrency transactions, it is a method to memorialize and make transactions immutable. Each transaction in the Blockchain is treated as a block, linked to the blocks before and after it. This explains that any change in a block would require a series of permissions from the stakeholders of the adjacent blocks, which makes the ledger a secure one.
Financial Institutions have begun researching the field of Blockchain to drive change in their organizations. Some of the giants in the Financial arena that have begun experimenting with Blockchain are Credit Suisse, Barclays, and HSBC.
2. Chatbots
The next generation chatbots are driving the future of the Financial Technologies industry. Several banking institutions like HDFC, ICICI, and YES Bank, in India, are adopting chatbots for improved communications with their customers. Interestingly, chatbots today possess the intelligence of a 2 or 3-year-old human baby.
As advancements and research initiatives roll out, these are sure to leave human adults behind in effective communication strategies. The quality of interaction, promptness of replies, and accuracy of decision-making of chatbots might well be enhanced in the year 2018.
- Machine Learning – Banks are expected to adopt regression models for better delivery of services and offerings in 2018. The models backed up by Machine Learning will be aided by the insights that are derived from Big Data Analytics.
- Security and Privacy loom as a challenge – While the digitization of the Fintech industry is a welcomed change, what is not welcomed is the security and privacy risk that comes with the advancements. 2018 is expected to witness a lot of rigorous developments in this area as organizations will strive to bring in security and privacy features into their offerings. Until now, financial institutions have been reactive to security risks and not proactive- a trend that is expected to alter this year. In desperate attempts to leverage the most advanced technologies for their services and products, organizations will be seen working harder on the security front.
- NFC (Nzar Field Communication) – In numerous countries, this technology is changing the way payments are made. The technology enables its users to conduct contactless payments by just holding their bank cards up to a reader. NFC is also built into most smartphones and can even be surgically implanted inside a human’s hand so that they can make payments with a simple wave. In 2018, NFC is expected to grow to maturity and might be of use with the growing use of wearable devices.
- Public cloud as a dominant infrastructure model – The shift towards cloud-based computing is just getting started in the Financial industry. Many financial institutions are eyeing towards cloud-based SAAS applications for business processes like CRM, HR and financial accounting. As applications and services are improving, cloud-based apps are defining the way core services are offered to the customers in the Fintech world.
- AI Adoption – The legacy financial institutions lag behind the start-up companies of today in the aspect of fixed costing and infrastructure setup. While the giants have a fixed infrastructure of IT requirements, whether they make use of it on a daily basis or not, the start-ups or the disruptors of today are working with only the resources they need when they need them. These start-ups are more focused on the ideas of using latest technologies like robotics and Artificial Intelligence to reduce their operational costs and deliver better services.
2018 will witness the bursting of some buzzwords and the invention of others, probably. But what is sure is that Fintech will change drastically. The wave of disruption will continue, only at an accelerated pace.
