Five Major Trends in FinTech Industry in 2022

Introduction

We often hear the name FinTech. It seems quite familiar, but many of us still don’t completely understand what it is. Let’s first see what it really is and how it helps to make our life more comfortable.

In simple words, FinTech (short for financial technologies) is all kinds of innovations that help make interaction with money simpler, more convenient, yet faster and more reliable. Such innovations may include software, programs, applications, business models, etc. 

FinTech is also an area where companies apply the latest solutions in a race for customers. For example, JatApp software development is one of the good examples of FinTech companies. It started as a traditional app development company.  But then they expanded the list of services they provide, areas where they can be useful. 

Development of FinTech in the last few years

The world has been experiencing a huge technological breakthrough during the last decade. It seems that they create new things every day. Our life, including the financial sphere, has become completely digitized. Even the pandemics of the past years could not influence FinTech much. In some areas, the challenge provoked a search for new solutions adapted to the new realities. 

Accenture consulting company predicts that the businesses that have previously invested in digitalization of their business will have the best positions in the market. The statistics show that not only in America but globally, people downloaded software by almost 20% more than before the corona. At least one FinTech platform was used by almost 30% of the world's population. 

Those FinTech companies that want to stay in business have to adjust to new realities to meet nowadays’ the demands of their customers. Let’s see what areas of financial innovation will show the most significant development this year.

Open banking

What is it exactly? Open banking, otherwise called API, is the provision of bank information about their customer to third parties if the customer gives their permission. After doing a FinTech industry analysis, experts say this financial technology is only developing and it seems to be very promising in the near future. 

Both banks and customers benefit from this format. Let’s say a customer is completely satisfied with the work of the bank and wants to stay its regular customer. But the bank has not yet integrated the latest technologies into its services, which is why it can’t provide the range of services other banks can. The customer wants to track his spending and for that, he needs to use analytic tools. Not to lose a regular customer, the bank transferred the customer’s information to a third party that can provide such analytic tools. Everybody is happy. The bank keeps its customer, and the customer receives regular reports on their spending. 

The bank can also provide its customer’s information to other financial institutions and other kinds of companies. This allows making the process of loan taking, and online payments for goods and services much faster. 

Biometric authentication

Expert companies have found out that most users hate remembering passwords and changing them once in a while. This is why many predict a great future for biometric authentication. 

Why is it good? First of all, it is practical because you don’t need to remember those passwords. Such factors as voice, iris patterns, or fingerprints can not be faked. It means that your data will remain safe even if you lose your gadget. 

Sustainable finance

Sustainability is something the world is very much concerned about now. Experts believe that future FinTech activities will be connected with green finance.  In this regard, the focus should be made on two things – sustainability and banking. 

The banking sector is constantly seeking green solutions to reduce their emissions of carbons. A good start was made by one company from Finland that offered an app with the help of which banks will be able to track their impact on the environment and choose more nature-friendly investments. 

Virtual payment cards

Virtual cards provide stronger guarantees of secure payments via the Internet. You keep a virtual card on your phone and you can use it for purchases both online and inland shops. 

For each purchase, you get a special number that is generated automatically and canceled when the purchase is done. Besides, when you want to pay for something online, you only provide the number of a virtual card. You don’t need to provide the number of your physical card issued by the bank. 

Virtual cards are beneficial for banks, because:

• They don’t pay money for issuing physical cards

• They provide more reliable protection of customers’ personal data

• The process of payment with a virtual card is faster 

Cloud services

Cloud services are not the inventions of this or last year, they were known before. But due to the pandemic, financial companies have realized how essential it is to stay connected with their customers, have the possibility to work remotely, and be mobile. During this time cloud services have started a new wave of development. 

Since people interact with vendors, it is natural that their data gets into vendors’ bases. Financial institutions and their security teams look for reliable ways to protect this flow of personal data. 

Businesses can utilize SaaS (Software as a Service) like Microsoft Office 365 or Slack. They can also build cloud-native apps in IaaS (Infrastructure as a Service) to enhance security and increase scalability. For instance, companies can hire Azure developers or AWS ones to create an application.

Using a cloud service, banks receive huge storage and computing power at affordable prices. Cloud services also support API. For these reasons, experts believe that this area will show a growth of 25% this year.  

Conclusion: 

The trends in Fintech described in this article become the drivers of the development of financial technologies. They will help financial institutions provide a wider range of services, protect the private data of their clients, remain in business, save existing and gain new customers. 

All the above-mentioned 2022 FinTech trends are united by one common feature – they make our life much more comfortable and safer. Some of them might face difficulties in adoption at first. But from a long-term perspective, they will definitely prove their efficiency in our cooperation with financial institutions.