January 24, 2020
How FinTech Trends are Boom to the Finance Industry in 2020
By : Ellie Brown
FinTech trends are continually evolving in the finance industry, and the impact is not going to let up in 2020. When technology crawls into the sector, it completely changes the way you do your business from navigating through risks to cutting down costs.
FinTech is an approach to introduce the modern financial practice in the industry. It provides institutions with new opportunities to expand beyond traditional services.
It has considerably improved customer experience, data security, data processing, and storage strategies. The impact of FinTech dates back to a decade. Ever since lending practices have become smoother and safer, declining in several populations without accounts. Here are the FinTech trends you will observe in 2020:
Incredibly smoother lending
In times gone by, documentation and the long-hour wait would try the patience of borrowers, especially when they needed money for an emergency. It was a situation like you are craving for chocolates and you have got a cavity. Over time, lending practices have improved. Now lending firms understand that they need to make it smoother and faster and hence online lending method evolved.
Once upon a time, it used to be challenging to secure a loan despite a good credit rating, but now lenders do not mind signing off on applications for loans for the unemployed with bad credit. Financial institutions are evolving the online platform to process mortgage applications as faster as those of short-term loans.
Since they are highly likely to save money on overheads due to online presence, they can pass on these savings in the form of competitive interest rates. Due to the high demand for financial products, interest rates are likely to be lower this year.
More Seamless communication and processing
Customer convenience plays a paramount role when it comes to online lending. Chatbots have made it easier for financial institutions to solve queries of customers round the clock. Robots can answer real-time questions.
By leveraging the power of technology, most of the major tasks such as payment processing, credit risk management and critical analysis of financial circumstances are done conveniently. Transactions and data are likely to be more secured with upgraded technology.
The synergy between various institutions
Apart from faster decision making and disbursal, FinTech trends have made operations smoother across all branches and other institutions. Brokers and direct lenders are collaborating over online platforms. Now direct lenders can register themselves at the panel of brokers.
Direct lenders get a chance to help those borrowers who do not contact them directly, and brokers get an opportunity to create a wide lender panel providing several deals to choose among them.
Further, it helps financial institutions to collaborate with credit reference agencies. Through online platforms, the former can get the record of a credit report of a borrower and inform the latter of timely payments and defaults made by borrowers.
Demand for financial products is likely to be higher
Financial firms enable borrowers to make payments through cellphones. Nowadays, mobile payments have grown by 70% in the world. Mobile banking has made it easier for people to access their finances anytime when they want.
Lending firms are expected to have more demand for their products because people do not have to get into the hassle of traditional methods. Recently, this demand has been observed in the crypto world.
Financial institutions are collaborating with the blockchain world, and there will be growing adoption for emerging currencies.
Getting real insight into affordability
FinTech lenders pull data from several sources to quickly determine how much a borrower can afford to pay back. Data is collected and analysed within seconds to scrutinise how much risk the borrower poses on a lender.
To date, lenders rely on utility payments, credit card bills, and outstanding dues to determine the affordability. Still, this year they are about to implement new technology to get a more comprehensive picture of borrowers. Traditional methods are not the only sources to determine credibility.
FinTech trends have drastically evolved the lending industry so far, and more changes will be observed this year. FinTech is bringing financial institutions and machine learning together to improve operations. It has introduced entirely a new way to do business, and this is just a beginning.