Financial services have gone through massive revolutions in recent years and more people continue to rely on modern technology to make their financial decisions. FinTech companies are part of the reasons why the world’s financial service system has seen great changes of late. But, how about the future? Well, here are nine trends that will drive the world of finance in the coming years.
Transparency and trust
Do you vividly remember the financial crisis that rocked the world during the last decade? It really impacted people’s trust in financial services, and that also explains why challenger banks were able to capture so many clients. These challenger banking institutions are glad to offer customers complete control over their transactions, far more than incumbents. Imran Gulamhuseinwala of Open Banking Limited has said that in places like the UK, financial services lack a well-functioning market. As such, Open Banking LTD is building trust and security for many consumers. “It’s an opt-in, not an opt-out,” Imran added. These are buzzwords for the emerging waves of financial services.
Crypto is a new financial movement on its own. The hype around cryptocurrencies and blockchain technology has never taken a nosedive since the pseudonymous Satoshi Nakato invented Bitcoin around 2008/2009. It’s impossible for financial gurus to forecast the future of money without mentioning cryptocurrencies. Decentralized cryptocurrencies like BTC keep on gaining momentum year by year. While some experts have their own reservations about BTC, top financial companies like PayPal are fast embracing the idea of these secure digital currencies. Crypto trading is a disruptive investment opportunity for individuals to build their own wealth. In developing countries without robust traditional financial service infrastructure, crypto can be used to digitize existing arrangements.
Innovation and expansion
It’s simply not enough to discover new solutions to old problems. According to London School of Economics professor Kenyu Jim, Chinese businesses often succeed because they are not affected by traditions. Simply put, it’s more difficult to renovate something than to start from scratch. Economies that do not have the burden of traditions easily innovate. For example, when Revolut innovations made it possible for customers to buy cryptocurrencies with the tap of a few buttons, other financial services quickly realized that they had to react. The financial world will grow large thanks to innovators in the industry.
Jessica Mah of the Indinero financial services company says that banking is changing for the better. As a CEO who started developing inDinero in her late teens, Jessica anticipates that changes in banking tech will come quickly, similar to the transition from flip phones to smartphones. These banking technologies will cover a broad range of sectors. The way banks operate, behave, and offer niche products, will generally get better as they become virtual.
- Artificial intelligence
AI is expected to continue with its phenomenal growth. And as rightly said by Louie Balasny, managing director of Botkeeper, consumers want results instantly — not in a week or month or two. With this idea in mind, Balasny directs Botkeeper’s business automation platform. His Boston-based company is changing the future of finance by offering bookkeeping automation services and 24/7 customer support to their partners.
Artificial intelligence will advance in its ability to provide more accounting in real-time. When reporting and charts are at customers’ fingertips, that is certainly going to revolutionize the bookkeeping industry and traditional accounting. Customers will look back in time only to wonder how they managed to function previously without AI.
Physical shops to close
Changes in the financial industry will not only increase the adoption of technology; they will also affect brick-and-mortar shops in one way or another, Michael Hsu of DeepSky predicts. Well, in the midst of the pandemic, some physical stores have been hit with massive closures due to lockdown. This development will push business owners to re-engineer their services and probably migrate to virtual platforms. One way to react to these disruptions is to take your business online or close down. The next few years will see many financial businesses roll along with the digital world.
App developers will grow up
Majorie Adams, founder, and CEO of Fourlane, is positive that the number of app developers in the accounting industry will skyrocket in the coming years. Every company wants an application to solve one problem or another. More people want to make changes to their existing applications, and it’s relatively affordable to build proprietary software. Programming platforms and app developers are using that field to build consistency in the SMB market for homegrown systems. Mobile app developers will play vital roles as the world’s finance industry changes rapidly.
Changes in financial technology will be meaningful to consumers as long as they are ready to learn about them. David Ehrenberg, CEO of Early Growth financial services, says that education will grow as automation revolves. His financial services company, Early Growth, offers financial assistance to early growth businesses as well as established enterprises. Without proper education, people may have a hard time adapting to automation and financial technologies. The world is starting to witness automation in the lower level accounting space already. Over the next couple of years, that will change how people in the accounting services industry do their businesses. Accounting professionals owe the world plenty of education responsibilities if financial services platforms are to benefit the average person.
Holistic financial planning
Since the last two decades, changes in financial planning has become more holistic. What really matters is looking at the bigger picture and trying to add wisdom alongside emotions. As the world tries to change its economic behavior, it’s important for people to blend their health, wellness, finances, and wealth — these are all part of the revolutions in the 21st century.
The bottom line is that the world’s financial industry has gone through dramatic changes due to emerging technologies. That said, there are still a lot of changes to expect moving forward. Breakthroughs in financial technology will be a hallmark of the next generation of financial entrepreneurs.