It’s always good to know what’s happening in the industry. Trends guide software development companies on consumer expectations and demands. This way, they are more likely to launch a solution that will win a significant market share. Fintech is a $7301.78 billion market projected to grow at 26.87% CARG during 2021-2026. That’s lots of opportunities. The fintech field is also highly dynamic. Therefore, once you launch a fintech development company, get ready to regularly upgrade your products with new capabilities.
Today, financial analytics, robotic process automation, mobile payments, and personal loans are some of the fintech technology trends to follow. Discover other trending finance technology solutions in our blog post.
FinTech Industry Trends Overview: Growth, Tendencies, and Top Players
The aftermath of the pandemic and early 21st-century financial crises has resulted in the digitization of financial solutions. It has become a powerful boost to small technology-based startup firms and market mastodons ready to innovate.
From 2017 to 2022, the fintech market has shown a $15.72 billion incremental growth, with 45% coming from the Americas. The US is the second-largest player and a global fintech innovation hub. The high disposable income of the population makes it a leader in the personal finances field. While the US takes second place, China is the largest FinTech market, with S$2,496 billion transaction value in 2020. The United Kingdom, Germany, and France are the top market players in the EU.
Facts About the Fintech Industry Trends
- By 2023, the global fintech technologies market will reach $698.48 billion.
- Banking is and will remain the leading fintech market segment compared to insurance, securities, and others.
- The data analytics segment, APIs and AI will gain importance during the next decade.
- Payment and fund transfer, loan, insurance & personal finances, and wealth management are the top categories of financial apps.
- The neo bank market size will grow from $47.1 billion in 2021 to $722.6 billion in 2028.
- 96% of global consumers know at least one fintech service for money transfer and payments.
- Over 90% of Americans use fintech, with baby boomers being the fastest-growing consumer segment.
- 76% of US fintech consumers say connectivity is their top priority when choosing a bank.
- 69% of US fintech consumers are ready to switch a bank if it doesn’t provide them with a fintech app.
- 1 in 2 global consumers utilizes an insurance fintech service.
- 45% of users feel comfortable getting AI-driven personalized financial advice.
- 43% of users don’t mind having an autonomous financial app that invests money, transfers it into savings, and recommends loan products.
Top Fintech Brands to Look Up to
In 2021, two fintech companies had a market cap of over $300 billion. PayPal is the most valuable financial technology provider with a $341 billion market capitalization. Ant Financial, Chinese Alibaba Group’s affiliate, takes second place and boasts a $312 billion capitalization.
Apart from the usual market leaders, recent years have been prosperous for fintech innovators and startups. According to Forbes, Blend, Hippo Insurance, BlockFi, Chime, Next Insurance, Robinhood, Stripe, and other fintech companies attracted thousands of millions of funding in 2021. These brands in many ways shape the global fintech industry trends.
7 Fintech Trends Every Fintech Company Should Consider
The last several years have considerably impacted the current fintech industry. The technology advances paired with market tendencies have given rise to the listed fintech trends.
#1. Advanced financial analytics and reporting
Artificial intelligence, machine learning, and big data analytics trends in fintech no longer surprise anyone. These are commodity technologies, which will dominate the industry in the upcoming years.
Software must automatically process loads of data to provide reliable suggestions to end-users. It’s an essential capability in many solutions, from personal loan systems to fraud detection. Therefore, if you develop fintech apps, be sure to implement advanced financial analytics and reporting financial technology trends.
#2. RPA financial technology trends
Digital workers may be as effective as human employees. It inspires financial software development companies to build solutions based on robotic process automation. RPA allows software adopters to enhance work efficiency with minimum investment. They can manage more critical and strategic processes while software robots complete basic tasks.
In 2020, the robotic process automation market reached $1.40 billion. By 2027, it will have an $11 billion value. These numbers show that continuous RPA adoption is among the finance software development trends to join.
#3. Customer-centric trends in fintech
The customer-centric approach rules every industry and affects how fintech companies design software. UX/UI, features, and integration capabilities are tailored to end-user expectations. Pampered with omnichannel experiences, consumers expect their financial applications to provide the same services they can get offline. Hence, if you are working on a fintech app, make sure it covers every need of its potential customers.
#4. Personal loans fintech technology trends
Currently, fintech grants 38% of personal loans. Given that the interest in small and easy loans increases, new personal loan services are likely to pop up. Companies create solutions with KYC/AML verification and automated loan processing to meet the market demand. By using them, consumers can shorten the lengthy process of loan-taking and obtain money within the shortest time.
#5. Blockchain for security
Blockchain in finances offers several capabilities that are valuable for security. It stores data across a blockchain-powered network, reducing the risk of data breaches. Each computer connected to the distributed network keeps a copy of the ledger to prevent a single point of failure and ensure transparency. Besides, after being registered in a block, data cannot be changed without the network’s consent. These fintech blockchain benefits should make your fintech company adopt blockchain technology for ultimate security (if you still haven’t done it).
#6. Voice payments are becoming mainstream fintech trends
While mobile digital banking remains among the leading trends in fintech, voice payments are gaining momentum. Some financial companies already use them as an authentication and validation method. In 2022, 31% of US adults will be using voice-enabled P2P payments. It’s a 7% increase compared to 2021, which will inevitably impact the fintech trends.
Voice Payment Adoption Rate
#7. Open Banking and Fintech Interoperability is Slowly Arriving
Open-banking is yet to come, but it’s approaching. Fintech companies and top market players admit the benefits of using open APIs that enable third-party fintech developers to build solutions around financial institutions. Simply put, it means customers can choose between multiple financial service providers and know much more about their finances. On the other hand, open banking gives lenders more transparency about consumers’ financial situation and related risks. It’s a win-win case. Despite the slower pace of adoption than predicted, open banking will remain the goal for many startups as it matches the global customer-centric tendencies.
The Challenge of Implementing Fintech Trends
The demand for quick innovations results in a shortage of skilled finance software development engineers. Fintech startups and companies lack the human resources to implement financial technology solutions. It’s one of the primary financial services industry challenges.
The need for considerable initial investment is also a challenge. When companies with a limited budget design sophisticated solutions from scratch, they may lack money. As a result, they start to use ineffective shortcuts in the middle of the project or fail to launch it at all.
How to deal with the challenges of fintech? Consider outsourcing some tasks and do project estimates beforehand. You must know your financial and human resources from the start. If you cannot afford to implement complex digital banking at once, go step by step. Outsource the part of the project and use API integrations or white-label solutions to optimize software development.
How Outsourcing Helps to Deal With Fintech Challenges
Fintech software development outsourcing allows fintech companies to find the necessary expertise remotely. If the local labor market doesn’t have the specialists with the required skills, they can hire a dedicated team elsewhere. It solves the primary fintech challenge – the shortage of software developers.
Cost-efficiency is another reason to outsource the development of financial software solutions. In the US and Western Europe, the software engineering cost is much higher than in the other parts of the world, including Asia or Eastern Europe. Optimized expenses allow fintech startups with a limited budget to tap into professional expertise.
Finally, outsourcing makes a financial software development company more flexible. You can increase the size of your team or reformat it as the project requirements change. It’s life-critical in the field that transforms as rapidly as fintech.
Our Fintech Software Development Services
Binariks is an agency offering software development services to customers worldwide. Contact us to assemble a dedicated term of fintech developers, QAs, business analysts, UX/UI designers, and other tech specialists for your project. We specialize in digital banking services, loans management, money transactions platforms, financial analytics, and other fintech domains.
Here are some of the projects from our portfolio we are proud of:
- Fintech messaging platform with ID authentication. It’s a platform for a Swedish company that enables banks, companies, and government agencies to send secure authentication requests to users.
- Fintech solution for structured finance modeling. A London-based software development and consulting company hired us to enhance the backend algorithms and efficiency of the platform.
- Finance and investment consulting platform. This business consulting software provides users access to an exclusive financial community where investors can find qualified finance professionals. The customer asked us to merge public, private, and financial platforms into a single solution for higher efficiency.
Need any fintech software development assistance or advice? Let's get in touch.