Robo Advisors And Other Fintech Trends For 2020

Robo Advisors And Other Fintech Trends For 2020

by January 28, 2020
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In the past few years, the way we buy insurance policies, invest, or bank has changed because of fintech. Customers haven’t only enjoyed cost benefits but also gain easier and more convenient access to financial products and financial transactions.

Fintech developments break down barriers and reduce the inherent advantages of the biggest firms for many years. These are changes that you can observe. However, human decision-making is still the most effective way to evaluate the standard difference between failure and success.

2020 is going to be a landmark year for the financial technology industry. Some of the innovations that one can expect include the expansion of Robo advisors with over $10 billion AuM (assets under management), blockchain’s continued rise, and the domination of mobile banking, among others.

Here’s a closer look at Robo advisors and other fintech trends for 2020.

A More Mature Blockchain Technology

The financial market is all eyes on blockchain and how such a decentralized technology can power the fintech sector more dominantly. Blockchain has risen to popularity because of cryptocurrencies that have raised $228 million and higher in the past.

There’s more to blockchain than cryptocurrency, though. It can also empower different products and services that require or rely on contracts. Since it’s a shared and open ledger, it’s a rapid and secure method of reporting and recording various types of transactions among a group of individuals or between two people. Avoiding middlemen, such as larger financial institutions, became possible because of blockchain.

In the past several years, the users of the blockchain wallet have increased by one hundred percent, only proving the remarkable statistics around the technology.

No doubt, blockchain technology can transform the entire financial landscape. It’s only a question of to what degree and when will it happen.

From healthcare to financial services, pilot programs of blockchain are now getting implemented across numerous sectors by countless businesses. International transfers are now possible within seconds, as seen in several Thai and Singaporean banking institutions, making Asia a positive case-study.

Speed, freedom, and security between transactions are what Millenial and Gen Z’s want, making blockchain a more critical component of fintech this year.

Domination Of Online-only And Mobile Banking

You’ve seen how online and mobile banking have skyrocketed in terms of popularity in recent years. It all started with the opportunity to avoid high fees from big banks when sending money internationally, thanks to Transferwise.

Monzo then came up not long after, allowing people to perform international purchases with no exchange rate fees, as long as it’s under two hundred pounds, through a bankless transaction. However, Monzo’s bankless option can’t get managed online or via mobile.

Innovation and banking will merge, which is going to happen this year. The online banking market will grow, and it’s something that banks have to prepare for, forcing them to shift from an overly complicated and outdated system of managing finances to the more streamlined fintech.

The instant, secure, and much smoother service of mobile banking will put banks that still require card readers for their clients to make online payments in an odd situation.

Improving services and better serving customers are also more achievable with online and mobile banking because of their ability to mine data about customer service expectations. Data from APIs can get shared with third-party companies to analyze areas for further improvement.

Thus, banking will continue to be convenient and instant, making its future very mobile-friendly.

A More Important Role To Play For Robo-Advisors

Despite the platform still in its nascent stage and still continuing to expand, financial offerings will have Robo-advisory as its essential part. Customers can enjoy cost benefits, especially when obtaining customized portfolios from Robo advisors. Staying ahead of the competition while meeting customer needs is the ultimate aim of companies.

That said, expect a blended solution of Robo advisory and traditional advisor in finance management.

More Use Of Artificial Intelligence

Chatbots are the ultimate proof that AI has been on the rise in the fintech industry. They can provide information about products and services as well as answer queries. AI will automate most of the backend work that previously gets handled by a person.

Enhanced analytics is another benefit of artificial intelligence, making data analysis a breeze and more accurate. Thus, delivering personalized financial solutions is now possible by analyzing the data of a customer through social media history and other data.

That said, 2020 will see more use of AI in Robo-advisory and other fintech-related processes and transactions.

Final Thoughts

2020 is going to be a fruitful year for Robo advisors and fintech as a whole. There’s no doubt that the trends mentioned and discussed above will surface. It’s only a matter of how they’ll impact the market.

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