‍

The potential of technology has emerged as a majestic superpower that we are increasingly dependent on in today’s world. Everything, or almost everything, revolves around these two words – finance and technology; the leading elements of this new age world, which symbolize the monumental scope of all that we can be and achieve.

Fintech, our shining star, has taken the helm of the structure of finance in these modern times. From purchasing products overseas, transferring money from one corner of the world to another, to making virtual and cashless transactions from personal mobiles, everything has become possible and easier, under Fintech.

And if there is one sector that was propelled forward during the pandemic, it is Fintech. Staying at home, and going cashless to avoid physical transfers between people, brought a compelling surge in this field. 

Fintech hubs worldwide are booming with innovative technology and are disrupting banking like never known before. Read on to find out more about the prominent trends in this space.

Neo-banks

Neo-banks are digital banks which exist only online entirely. This particular type of banking has been one of the major disruptions in the traditional banking sphere, because of negligible human interaction, allowing users to avail all kinds of banking services from any corner of the world with user-friendly interfaces.

‍

This concept has widely been adopted by new and old institutions alike, where digital banking services like money transfers, account opening, KYC, and many more services are given as an extension to the prevailing ones.

‍

Robotic Process Automation

An augmentation to digitalization and automation, RPA – Robotic Process Automation involves employing robotics or digital employees to work in place of humans to make several processes more efficient and increase accuracy.

The primary intention of engaging RPA in systems is to increase efficiency and cut down on costs which enables the RPA employers to focus their time and resources on improving customer services.

‍

Blockchain

Blockchain technology has intrigued the financial sector because of the blanket of security that comes with it. This Avant Garde technology disrupts the centralization of procedures, making it possible to store data in a decentralized space, which is almost impossible to falsify or manipulate.

The level of security that comes with this innovative technology makes it possible to conduct transactions overseas safely, which is immensely appealing. 

‍

Artificial Intelligence (AI) & Machine Learning

These prodigies of innovational technology have introduced us to the multitude of possibilities that can transpire when the human mind gets creative. Chatbots, market trends analysis, flawless cyber security, credit and loan resolutions, and customized services are just a few of the many breakthroughs that have materialized because of AI and machine learning. 

As more and more processes corroborate with AI, the extent of identification and protection against cyber threats remarkably increases and the operational costs of financial institutions go down substantially, making AI an indispensable pillar.

‍

Biometric Security Systems

An extension of AI, biometric security systems are the coming of age of the brilliant concept of substituting signatures with more definite and secure options like fingerprints, facial and iris recognition, voice analysis, etc. 

This brings the structure of financial security to an altogether new pedestal, where personal information is corroborated with biometrics to create fool-proof cyber safety. 

‍

Open Banking

This is the space where banks can join hands with third-party service providers, with the help of application programming interfaces (APIs) to enable transferring data and services between customers, banks, and third parties.

For instance, a customer could allocate powers to a third-party app to make transactions using their bank accounts which makes payments, standing instructions, and connections much easier and more convenient.

‍

Regulation Technology

In this, technology is heavily employed to handle and monitor regulatory compliances, which enables systems to act in accordance with compliances, that could otherwise be omitted due to human error. Reg-tech versatility allows the same institution to adapt and change technologies according to jurisdictions and locations.

‍

Gamification

Inspired by people’s fascination to get rewarded, financial institutions also have joined this corner, where they apply gamification strategies to engage their customers. The most prominent technique has been to give rewards based on transactions and the value of the customers. Some institutions also provide scorecards and/or badges when customers complete a particular task, like making 10 transactions using the bank’s app in a month.

Gamification has enabled a more profound engagement between banks and customers, where banks analyze and read the customers’ actions and provide incentives accordingly.

‍

Final Thoughts

The emergence of Fintech started with tiny steps a little after 2012. Ever since then, the momentum of its expansion and adoption has only increased worldwide. Today, there are more than 26,000 Fintech start-ups bridging gaps and innovating relentlessly to make financial services easier and safer. Around 30% of traditional banking customers have adopted and received financial services from third parties and the number is only rising every day.

It would be appropriate to say that the storm of Fintech is not here to settle.

‍

‍

Electronic Payments, more commonly known as e-payments are digitalized payment solutions, offered by and on behalf of banks by in-house setups or third parties. The evolution of payment solutions has witnessed a steep rise in terms of innovation and adoption. These convenient, user-friendly solutions have been created in a way to suit the seller and the consumer both.

The e-payment solutions are not limited to only making payments for purchases, by virtue of their adaptability, they are now being used for top-ups, payments to and from banks, cross-border payments, and many more. Digitalizing payments has disrupted conventional methods of making transactions, by bringing simple and convenient alternatives to handling cash. 

The quality that has helped revolutionize e-payments is the level of convenience that comes with it. 3 out of 4 people exposed to the workings of the digital age are adopting electronic solutions to keep up with the rapidly increasing changes, and to improve connectivity worldwide.

‍

‍

Benefits of E-Payments

An organization’s online presence and dominance govern how it is perceived by the masses. The more innovative and easy solutions the organization provides, the more customers and in turn investors, it can attract. With the growing number of people switching to digital platforms for conducting transactions, it has become essential for banks and third parties to offer solutions that their customers can relate to. There are several benefits of providing and adopting e-payment solutions.

‍

Omniscient Presence

Digitalization has immensely disrupted the normal everyday things in our lives, in a good way. The aggressively increasing popularity of e-payments has mandated banks, vendors, and third parties to offer these options to people. Because of this, we can now find these options and solutions almost everywhere.

‍

Quick Turnaround

e-Payments happen in real-time. Unlike conventional methods, digitalization has enabled quick transfers and transactions, which otherwise would take several days. Solutions like fast air-time top-ups from anywhere have increased their popularity. 

‍

Simpler Processes

Apart from being quick, digital payments are much simpler and easier to conduct. The customer does not have to go through the trouble of waiting for a week to get their cheques cleared. 

When simple procedures combined with user-friendly interfaces are made available, no one would want to go back to conventional, time-consuming, and complicated processes.

But with every asset comes a liability. As is the case with e-payments too. With growing connectivity, digitalization, and countless possibilities, there are risks and expenses to consider. 

‍

The Challenges

e-Payments is one of the products borne out of the amalgamation of finance and technology – Fintech. The risks and challenges that can potentially hinder the smooth functioning of these can be subdivided into two major categories- risks specific to the finance section and the challenges associated with the technological segment.

‍

Financial Risks

Security Regulations

Innovation and creativity require a free hand and space to experiment and grow. But, without regulations and discipline, the entire space would become extremely risky. Providing secure gateways to conduct payments and transfers is mandatory and even a minute slip can cause colossal damage.

‍

Authentication

One of the most common methods of providing e-payments is for a Fintech server to partner with a conventional institution to back the latter’s financial services with technology. In this method, it is crucial to have mutual authentication by both parties before processing an online payment. Authentication of the user or the device helps in developing a fool-proof system for payments to go through.

‍

‍Data Privacy

Financial information of the user and their dealings are very sensitive in nature. The security system to protect this type of data requires advanced techniques. With the growing ease and frequency of making payments on miscellaneous websites, users are given options of saving their financial details, like their card numbers and expiry dates to enable quicker payments. When this type of sensitive information is saved on the internet, the financial institutions and the third parties are partly obligated to protect the information and the user from falling into the hands of malicious activities. 

‍

Technological Challenges

Adaptability

With the growing presence of Fintech worldwide, one of the primary objectives of Fintech servers is to make their system and infrastructure such, that they can adapt to different requirements and setups. The modernization in this domain has to be compatible with conventional methods too, as digitalization cannot completely replace the conventional methods. The intention of digitalization shouldn’t be to override other payment solutions and methods. 

‍

‍Easiness

Easy and simple processes act like Pied Pipers, pulling everyone towards them. With the majority focused on seeking convenience and user-friendly interfaces, it becomes a challenge for Fintech servers to simplify their procedures further at such a competitive rate. Simple and reliable e-payments form the base of everything that a consumer is looking for.

‍

Other Challenges

Expensive

Digitalization demands fierce advancements and innovation in technology which involves extensive procedures, hiring experts, and producing intelligent results. This entire process becomes expensive. With the growing demand and competition, the Fintech servers perpetually need to be on the lookout for methods to save on their costs to bring down expenses. 

‍

Network-dependent

e-Payments are network-dependent. Even though they are highly convenient and marketable, areas with little or no network cannot accommodate digitalization. This is one of the major obstacles which hinder the growth of e-payment solutions.

‍

‍Country Laws

When it comes to overseas e-payments, it is mandatory for Fintech providers to abide by country laws in the countries they are offering their services in. Not abiding by these laws may lead to their services being terminated.

Overall, the upsurge in the number of Fintech start-ups all over the world has changed the face of digitalized payments. With more and more people adopting these solutions, it has become crucial to regulate how Fintech operates. Data protection and privacy along with much-needed versatility, have poured in countless obstacles and hindrances. It is up to the Fintech industry to bring its game up to a level where anyone from any corner of the planet can make quick and secure payments, at any time.

‍