The global pandemic has rapidly accelerated the shift to digitization for many aspects of our daily lives. While the most notable shifts online have so far been with education, shopping, and employment, COVID-19 has also had quite a significant impact on the real estate and fintech industries.
Prior to the current crisis, it was obvious that the future of fintech would be pivotal for financial services moving forward.
Now that the world has been dealing with COVID-19 for over 12 months, here are some of the most important innovations and changes throughout the new age of the fintech industry.
6 Important Innovations in Fintech Industry 2021
1. Technology Adoption
Traditional banking methods have been steadily declining over the past decade, which was exacerbated further during lockdown by lower incomes and higher unemployment.
The good news is that there was a significant increase in the downloading of financial applications to mobile smartphones and tablets as more consumers had no other choice but to adapt to more digital lifestyles.
Plus, as support increases for digital financial payments, debits, and credits, system integration will more likely continue the upward trend of interest in fintech and maybe even accelerate it post-pandemic.
2. Higher Personalization
There has been an increased prioritization over the last 12 months in providing customers with much more personalized financial solutions.
Therefore, fintech companies are finding new ways of improving their data assessment methods and forecasting capabilities to ensure they have a better understanding of what each individual needs.
As they move beyond simply profit-seeking in their transactions, they are offering more complete products that more successfully match client wants, needs, and expectations.
It is this kind of personalization of fintech products that will provide improved credit scoring techniques as well as securing more customers.
3. A Focus on Cybersecurity
The acceleration towards digital transformation has been positive, as people of all ages have been learning how they can access financial services at any time online. This has also enhanced the risk of cyberattacks, causing an increased number of online threats to fintech data.
The fintech industry as a whole has been counteracting this by creating apps with improved security features, financial management, and customer services that ensure client data is immune to phishing and cyberattacks.
4. Expanding Mobile Payments
The demand for online financial services in the digital era of today was already high, but it’s become even more increasingly popular during the lockdown.
With contactless payments via mobile applications now a priority for the majority of consumers, many fintech companies have not only been able to maintain their profit margins, but some have even managed to increase them.
The recent credit demand during lockdown overwhelmed many traditional banks, which could become a crucial driver of change towards fintech credit and lending services in the future. This is one area in the fintech industry that has an opportunity to evolve and grow, which may help facilitate the acceleration towards cashless payments.
5. Financial Lending
Securing funding throughout the COVID-19 pandemic has unsurprisingly become almost impossible for many start-ups in the fintech sector. In order for them to remain viable, these firms have tightened lending requirements of the loans they offer small enterprises.
This is most likely because the majority of investors have been more cautious than normal due to the economic volatility and instability.
Although this has been proving to be quite tough for those in the fintech industry, defaults have generally been raised, providing an extended grace period that will hopefully see them become successful over the long term.
6. A Transpiring ‘New Normal’
Despite forcing many in the fintech sector to adjust operational expectations, and numerous short-term challenges facing services, the pandemic certainly hasn’t halted overall progress.
It may not be easy, but with eCommerce digital solutions set to continue increasing in demand, there are a myriad of future opportunities there for those in the fintech industry willing to take a chance.
Given the increasing reliance on technology and the acceleration of emerging digital trends, the fintech industry could look completely different within only a few years.
Fintech services are all set to become a leading part of the continuous transformation of the world after covid-19.
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Author: Emma Williams