Keeping an eye on the rapidly changing sector of digital finance is certainly becoming crucial these days. Indeed, technology is radically shifting the dynamics of financial services on a major scale. That said, let’s discuss five emerging trends likely to shape our future in this sphere.
The first trend of note is Open Banking. Essentially, this refers to the concept of sharing consumer financial data among organizations, naturally with the necessary permissions. It seems like a revolution waiting to happen, with the potential to transform the delivery of financial services. Through open banking, external developers access databases to build new, refined programs and services. This provides unprecedented control to customers over their financial data, also fostering competition and industry innovation.
Next, let us address Digital wallets and contactless payments, another shaping trend increasingly gaining traction. These digital platforms offer a faster, safer option to conventional payment processes. No wonder applications like Apple Pay, Google Pay, and Samsung Pay are amassing popularity, reducing fraud risks in transactions and offering ease and security. This trend is driven by the ever-increasing use of smartphones.
Moving on to the third trend, Blockchain technology and cryptocurrencies like Bitcoin and Ethereum, which have been grabbing attention recently. The utilization of cryptocurrencies in regular transactions is still in its early stages, yet their inherent benefits like faster, borderless, and cheaper peer-to-peer transactions have the potential to disrupt existing financial systems. Additionally, blockchain technology has potential applications in diverse fields like supply chain management, identity verification, and smart contracts.
Robo-advisers and AI-powered financial services form the fourth influential trend. Robo-advisers are automated investment platforms that offer personalized services using data analysis and AI. Such platforms appeal to tech-savvy investors, offering a unique investing experience with lower fees than conventional human advisers. Machine learning and AI are spearheading innovations in several financial services, like fraud detection and customer care.
Last but not least is the trend of Embedded finance. This pertains to the integration of financial services into non-financial software and systems. This development allows businesses across sectors to offer financial products or services to their clients directly within the app or platform, thus enhancing customer engagement and creating new revenue streams.
Undeniably, these emergent trends are set to change the face of digital finance. Still, skepticism remains regarding the scalability, privacy and legality involved in these disruptive practices. But the burgeoning potential and expected efficiency gains, hint at an exciting future for the financial services landscape.
Source: Cointelegraph
