13 Sep 2022
Pivotal fintech trends that IT executives need to know
In this article, you’ll learn:
- Why IT leaders need to pay attention to fintech market developments
- If programming is the foundation of business and finance
- The top technology directions in fintech
- How the IT industry works with fintech
Why is it important to monitor trends in the fintech sector?
Being an IT executive means keeping up with industry leaders. Some companies struggle to choose the best technologies for their projects, even though innovative solutions are widespread in the financial and IT sectors. For several years, the industry experienced the development of machine learning (ML), artificial intelligence (AI) and blockchain technology. Though each of these solutions is just getting off the ground in many countries, Banks are taking advantage of the digitization of cash and processing personal data using blockchain technology.
In the retail sector, Amazon uses ML, AI and robotics to operate warehouses, while the transportation industry is being revolutionized through the production of cars that have a range of artificial intelligence solutions. Every industry is taking advantage of the conveniences of current technologies. For these reasons, you should learn about and understand the IT opportunities made possible through the fintech sector.
Fintech as a business strategy in IT
The worlds of finance, IT and business are intrinsically linked and supportive of each other. Banks and financial institutions benefit from finance, capital flow and the provision of an IT structure that guarantees the speed and security of transactions.
You can’t predict the direction of finance, but the IT industry will develop solutions used in settlements, accounting and capital flow – for this reason, IT leaders should be aware of fintech developments.
Bring infrastructure and security to the fintech industry
Entities that deal with financial services use various systems based on a combination of programming languages. During the COVID-19 pandemic, the need for software services increased, showing that many companies had IT challenges regarding resilience and scalability. This explains why the global cyber security market size is expected to grow from an estimated value of $173.5 billion US dollars in 2022 to $266.2 billion US dollars by 2027, according to analysis from Markets and Markets.
The IT industry is essential to ensuring the security and resilience of systems from cyberattacks and errors. You should follow the finance sector and related services, analyze mistakes and implement solutions based on current threats and future vulnerabilities. The best financial services deliver new digital solutions that guarantee system security.
Top fintech trends linked to the IT sector
Fintech and technology go hand in hand. CIOs and other tech executives should observe these fintech trends:
Digitization of cash is becoming a standard as some institutions specialize in providing digital services for banking. It’s a solution that helps eliminate bureaucracy, queues and mitigates the risk of lost or stolen wallets. More and more banks are betting on digital payments, reducing employee costs and speeding up cash transaction processes. It’s worth knowing and implementing the latest technologies that will make digital banks even more accessible to people.
Blockchain technology is associated, by many, only with cryptocurrencies. Today, approximately 40% of banks use blockchain technology to ensure secure transactions. Decentralized networks do not require third parties to control them, making data safe and out of reach of bad actors. Since 40% of banks are implementing blockchain technology into their solutions, the rest of the market is still open to potential new solutions.
Robotic Process Automation (RPA) is an innovative solution in almost any sector, and if you are an IT executive, you can’t ignore this field. RPA technology uses digital robots to automate employee processes. It can operate 24/7 without interruption and can be used to automate back-end processes, e.g., account maintenance, credit card processing and so on, helping to reduce costs and improve customer service. These advantages show why, per Gartner research, 80% of finance leaders have implemented or are planning to implement RPA.
Artificial intelligence (AI) and machine learning (ML) are currently the most popular buzzwords in the fintech industry and strongly correlate with the IT sector. Most fintech players use AI as virtual assistants in a corporation (chatbots), while machine learning helps to evolve AI allowing it to become more efficient during conversations. The two technologies have a symbiotic-like connection and are part of almost every modern company, from cryptocurrency exchanges to banking and insurance industries.
Biometrics is a trend growing in popularity due to its security and simplicity. Biometric technology measures and analyzes people’s physical characteristics, enabling specific and individual features of a person that are not repeatable – DNA, fingerprints, retina and iris of the eyes, voice patterns, facial patterns and hand features – to be used to authenticate transactions. The technology helps a given device, such as a scanner, obtain traits, process the information through an algorithm and translate this knowledge into numbers. The system then compares the value in the database with the biometric data entered by the user with the scanner. Biometrics would not be possible without creating or operating hardware, databases and other authentication software.
Open Banking supplies third-party financial service providers with access to consumer banking, transaction data and other financial information from banks and other institutions through application programming interfaces (APIs). Open banking is a significant source of innovation reshaping the banking industry. By using online accounts, Open Banking helps lenders get a comprehensive overview of a consumer’s financial situation and risk level, resulting in more favorable loan terms. It also helps consumers get a more accurate picture of their financial situation before they get into debt.
Fintech and technology are interwoven
Fintech needs to take advantage of developments in the IT industry. Cloud technology, blockchain, artificial intelligence, and machine learning are just a few situations that put financial institutions in a winning position. Biometrics is a commodity; banks digitize cash and process data using blockchain technology, and factories use artificial intelligence (AI). It’s worth familiarizing yourself with such solutions by analyzing the fintech market and emerging tech solutions. Follow fintech trends and develop your team, and you will surely succeed in IT.
Allying with an experienced and skilled software partner is the fastest way to take your fintech business to the next level. If you want to learn more about such cooperation, or discuss your situation, use this contact form – we’re eager to share our expertise, and our experts are happy to help you find the best solutions.