Nowadays, the inside of a bank branch is almost always depicted in vintage films rather than in person. However, if you look at your phone, you most likely have two or more financial apps on the home screen. So, what significant development is the cause of this change? Short word, big concept: fintech.

Fintech, or financial technology, is revolutionizing various aspects of money management, including storage, savings, borrowing, investment, and payment. Despite rapid growth, a market correction in 2022 has slowed fintech's growth, prompting banks to develop their own digital products. Competition for client deposits and balances is expected to intensify in the future.

What is fintech?

Fintech are companies that rely primarily on technology and cloud services and less so on physical locations to provide financial services to customers. Essentially, fintech companies aim to disrupt traditional financial systems by leveraging advancements in technology to streamline processes, enhance accessibility, and provide tailored financial solutions to individuals and businesses.

1. Fintech will continue to benefit from the radical digital transformation of the banking industry and e-commerce growth around the world, particularly in developing countries.
2. Fintech are expected to grow at three times the banking industry's rate between 2022 and 2028, driven primarily by emerging markets in Africa, Asia-Pacific, Latin America, and the Middle East.
3. Fintech in growth stages show the highest sensitivity to 2022's downturn, while early and pre-seed stages show greater resilience.

Which technologies are shaping the future of fintech?

Over the next few years, we anticipate that the following seven technologies will significantly advance fintech development while shaping the competitive landscape of finance:

 Artificial Intelligence (AI):

Banks and financial institutions are adopting an AI-first mindset for value creation and to compete with expanding technology firms.

Blockchain:

Technologies like smart contracts, zero-knowledge proof, and distributed data storage are crucial for fintech innovations like digital wallets, decentralized finance, and non-fungible tokens.

Cloud Computing:

Cloud computing enhances efficiency and reduces costs for financial services companies.

Internet of Things (IoT):

IoT applications in finance include perception systems, smart sensors, wireless communication networks, and support for applications and operations.

Open-Source Software, Serverless Architecture:

Essential for both technology companies and traditional financial institutions launching new fintech businesses.

No- and Low-Code Development Platforms:

Allows for application development through graphical user interfaces and configurations instead of traditional programming.

Hyper-Automation:

Utilizes AI, deep learning, event-based software, and other technologies to enhance decision-making efficiency and automate work processes.

In conclusion, open banking represents a transformative shift in finance, empowering consumers to share data for enhanced services. Despite the necessity of consumer consent, its potential benefits are vast, fostering innovation, competition, and efficiency. As fintech transforms banking, embracing open banking is essential for incumbents and newcomers to stay competitive and meet evolving consumer needs in the digital era.