The financial services industry is riding on the wave of Fintech Application Development going through a creative and evolutionary period. The user experience has been changed by Fintech applications. Right from ATMs (Automated Teller Machine) and swipe machines to online and mobile banking, mobile wallets, apps for automated bill payments; Fintech apps have improved customer banking and payment experience. Fintech solutions also streamline the process and reduce costs, along with the improved convenience and comfort of carrying out financial activities.
Fintech application development companies have come a long way when it comes to developing a secure Fintech application and with enhanced security and keen interest from all the sectors; today Fintech is disrupting the Financial industry.
Some of the best and big financial services are enlisted here; they are reshaping the product of Fintech applications.
Billing and Payments Applications/Software:
In previous years, payments & transactions were dominated and managed by credit card firms, major banks, and massive financial giants. However the advent of digital payments/billing apps has changed the entire scenario and shaken the major players’ control of payments. With full ease and accessibility, digital payments have turned conventional cash-based operations into cashless ones. According to Statista, the transaction volume of digital payments around the world amounts to US$ 3,952,706 million in 2019. New technology solutions such as camera, blockchain, fingerprint, retina scan, etc. are used by businesses that offer payment solutions to provide customers with seamless POS processing and a better mobile-based experience to provide better user interaction.
The Digital Payments/Billing solutions have two major sectors
- B2B payments (& cross border payments)
The 2016 Bloomberg study reveals that the B2B and cross-border payments amounted to $150 trillion then and this means that by now it must have increased by an immense sum. Although security, accuracy, and flexibility have been a major challenge for B2B payments and cross-border transactions, technical solutions are available to help companies achieve safe payments and transactions. Some of these channels for technology include—
- Customized & private Blockchain systems with the most protection & accountability for real-time transactions.
- E-invoice platforms for easier approvals and delivery of payments.
- Payment processing systems that give customers a variety of payment methods or wallets to choose from.
- Mobile B2B platforms for faster payments and enhanced data management.
Paypal, Payfirma, Wepay and so on are among the best examples of efficient B2B payments or cross-border payment solutions.
- Mobile Payments
With mobile wallets, such as Apple Pay, Samsung Pay, Google Wallet, etc., more and more people choose to use mobile wallets instead of their credit cards to initiate payments. While there have been security problems when using mobile payments, biometrics and NFC technology have helped to mitigate these issues.
Banking institutions offer applications for “banking as a service” for their customers to carry out online banking activities. Online banking increases consumer experience by incorporating technological advances like Artificial Intelligence, biometrics, speech and face recognition. Online banking, considering the digital mode, is highly cost-effective. Atom Bank (with digital mode only and no branches) is one of the only digital banks. The rationale for digital banks being cost-effective is that it does not attract costs to its customers from having physical premises and offering convenience. Since this branchless concept is distinct from other banking situations, the cost is reduced substantially.
Mobile Banking Applications
The financial sector is not left behind, with many companies joining digital modes/platforms for their services. We live now in a time when we are deeply hateful of our purchases and deposits waiting in line at banks. In reality, banks, similar to their customers, are also quick to adapt to technology. With safe logins, mobile banking apps deliver all banking operations at your fingertips.
Money Remittance/ Money Transfer
We remember names such as Transferwise, TransferGo, WorldRemit etc. when the term cash remittance arrives. These businesses allow users to send money to more than 100 countries and the recipients can receive the sum through bank deposit, cash pick-up counters, mobile money, or even delivery at times. Money remittance/transfer alternatives make the procedure less time-consuming, less costly and potentially do not even require the sending of funds abroad. The peer-to-peer (P2P) money transfer network takes care of it. P2P is one of the best Fintech developments to invest in and grow. The P2P platform connects two people’s digital wallets to exchange money. There are three common types of P2P networks / applications:
- Standalone platforms (which does not rely on other financial organisations to conduct a transaction). PayPal is a standalone P2P application.
- P2P applications from Bank Centric (with a financial organisation as a transaction intermediary).
Other than P2P money transfer sites, another primary path in the growth of fintech applications is P2P lending. With reduced costs, P2P lending is aimed at speeding up and automating the loan request & process. Lending platforms easily track the time of approval of the loan, collect cash from the borrower and streamline the entire process.
The most striking aspect of P2P lending services is that machine learning is used to recognise and spot borrowers who do not deserve loans on the basis of their credit score. Intelligent system-backend algorithms estimate a customer’s creditworthiness.
Prospect acquisition, burrower application, credit signing and tracking, disbursement, collection and recovery are taken care of by P2P lending applications.
Personal Finance Management Applications
It has never been easy to manage your finance before than now with the personal finance management or money management applications available in the market. Whether it is bill payment, shared expenses, managing subscriptions amount, debt payoffs or any other wealth management functions; PFM applications are at your fingertips. In the form of data visualisation, categorization, and spending patterns, these applications allow users to collect all personal money accounts and list personal finances.
Robo-Advisors are the newest personal finance management advisory services in the industry that are automated and run on algorithms that recommend wealth management. Betterment LLC is one such company for personal financial management & wealth management focused on robo-advisory.
In the insurance technology market, CB Insights announced $1 billion in funding. As analytics and technology can use data to assess customised deals and dynamic pricing for individual customers, insurance Fintech Applications are a major benefit for the insurance industry. In order to analyse consumer trends, Insurtech applications are also created and custom insurance products are created based on this knowledge. For example, for an individual seeking car insurance, the application will determine driving patterns and recommend payment strategy on the basis of the same. Insurtech software also helps each client to select from the best insurance plans.
To Move Forward
The above sectors are some of the highest performing areas of financial services and have changed a lot due to the rapid growth in the development of Fintech applications; some have developed very well and some are at a success stage that is increasing. Investment in the financial technology sector will offer positive results in the future. There is a need for enhanced security safeguards with more technologies in use, as Fintech application developers must once follow best practises to ensure the security in Fintech apps. But in the end, it’s fair to assume that in the coming years, Fintech is expected to increase by leaps & bounds.