Financial technology or FinTech is here to stay. As the Philippines continues its move towards fully embracing the digital economy, FinTech will play a major part. According to international experts, the top trends to look out for are as follows:
Bank and FinTech Partnership
There was a time that FinTech directly competed with the banks. However, in 2016, the two industries decided it was in their best interest collaborate and in 2017, that collaboration is becoming stronger and wider. The collaboration added to the strength of both industries. The agility and forwardness of FinTech appeals to the younger clients of the traditional banks that into mobile banking. As time moves forward, so will this collaboration.
Increasing Use of Digital Channels
By 2020, over half of the global workforce shall be millennials. The millennials want it fast, want it now and will not wait for their banks to understand them – they will look for banks that already do. While cash still is king for the millennials, there expectations for their banks to improve on the use of digital channels will increase. For banks, this should be an immediate priority i.e. looking to shore up digital channel solutions
Convenience is key in the digital economy. Traditional payments that require multiple days of processing and clearing will most probably be a thing of the past as real-time payments using point-to-point (P2P) platforms are becoming stronger. The capability to P2P and to qualify and approve loan requests real-time and remotely will be game changers for banks.
One of the main advantages of FinTech is that it reduces payment friction. By removing the walls and borders that cause the payment friction, ease-to-pay adds to the attractiveness of FinTech, as it removes “traditional” barriers that cause frustrations and delays in having to make secure “fire-and-forget” payments.
Blockhain is the brainchild of the FinTech industry. It’s being explored by progressive financial institutions as a potential efficient solution for records-keeping and lending. Blockchain is based on the cloud, where a secure but accessible digital ledger is used to record and keep-track of transactions in real time that may help financial institutions reduce the cost of processing payments, but develop new services that can generate new revenue for the organization.
Internet of Things (IoT)
The world is moving into Internet-enabled devices more and more. Therefore, IoT will put a big emphasis on digital banking experience, where people will be able to open a bank account or check the status of any of their bank transactions on any Internet-enabled device. As the digital economy moves towards a more connected and accessible future, expect FinTech firms to start offering IoT-based services.