The fintech industry has been undergoing deep-seated changes for quite some time now. This revolution can be attributed to the trend of fintech adoption by sectors across industries. For instance, by March 2020, India accounted for 87 per cent of worldwide fintech adoption, showing that fintech adoption has been particularly going strong with Indian markets. As such, various notable trends dominated the fintech industry in 2020, continuing to define the future in 2021 and beyond.
The rise of digital wallets
If there is one distinction that 2020 is known notably for, it is the emergence of a cashless economy due to the onset of a global pandemic that frowned on physical transactions. Cashless payments took over and eliminated the traditional modes of payments such as cash, debit and credit cards out of the equation, thereby giving birth to a more convenient and safe payment model. Therefore, the disruption of industry by cashless transactions against the backdrop of a pandemic-hit economy is creating divergent opportunities for digital wallet operators while, at the same time, making life easier for consumers.
In effect, what is implied here is a digital experience that is becoming the new normal, thanks to the pandemic and the rise of tech-savvy consumers. The e-commerce boom has witnessed the transition of consumer spending from brick-and-mortar stores to online outlets, resulting in the rapid proliferation of evolutionary payment solutions along the way. This effectively outdated the era of cash and card to a great extent, and shift focus towards digital solutions.
A multi-functional platform offering different services
Studies found that consumers prefer, above all things, access to multiple functionalities and services on one platform. This preference is something that is quite apparent from a logical standpoint because such a versatile platform can transform consumer service and enable consumers to avail facilities within reach of a single tab on a mobile device. Numerous fintech players were quick to notice this demand and responded with solutions that gained a foothold in the fintech ecosystem the moment they were out. The technological innovation came in the form of digitisation, which is now a force redefining consumer services.
As such, a multi-functional platform can help simplify business for both small and medium merchants and augment the smooth flow of business since such a service is yet another drastic stride towards providing a best-in-industry digital experience.
Blockchain and Big Data
Blockchain and Big Data are two advanced technologies that have taken the technology world by storm. In the meantime, the surprising facet of the two technologies is that while they are individual entities, they are also two complementary technologies and are at their best when combined. To that end, experts opine that brands leveraging blockchain and Big Data will benefit the most and exert an edge over other players. By leveraging blockchain, the financial industry sectors can avail new heights of security with reduced fraudulent activities and phishing attacks. In the meantime, with Big Data analytics, financial institutions such as banks and micro-lenders can delve deeper into customer needs and satisfaction, and come up with more profound insights that can help in developing new consumer-oriented products for higher consumer satisfaction and larger sales volumes.
In a way, blockchain and Big Data are two sides of the same coin. Though blockchain may not be explored as extensively as Big Data, the two technologies are widely seen as two different sides of the same coin. While blockchain serves to validate data/data integrity, Big Data analyses data with the objective of actionable insight, making industry predictions from large amounts of data. As such, while blockchain is making strides in data management areas, data is revolutionizing the nature of transactions.
Outlook for 2021
The development of cutting-edge technologies has always been the hallmark of fintech, thanks to its mission to offer the most convenient and practical solutions to consumers. Now, going forward, financial services will focus on providing a customised, local offering to their customers by leveraging data analytics. Rapid growth in this sector is guaranteed since technology will be driving more advances in financial services. One can say this is yet another beginning of considerable fintech growth in the days to come. To cite an example, the Reserve Bank of India has been rapidly embracing the trends discussed above and implementing friendly policies to drive more growth.
So to conclude, the needs and demands for more advanced and safe financial transactions are increasing day in and day out. This is a boost for payments and the banking industry to brainstorm on new innovations and keep up the evolution momentum. To that end, it is a matter of time before we see the new heights of the fintech market and the great strides it will continue to make.
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