We asked a few professionals in the FinTech space what technologies they saw as drivers of forward progress and disruption…..
A major technology driving the Fintech space has been the massive improvement to UI/UX. Using analytics to figure out how people want to interact with software has been transformational for the Fintech space. Previously, major financial institutions had very clunky interfaces for letting people interact with their finances. Now, Fintech startups are partnering with and being bought up by major financial institutions primarily because they have a UI/UX that increases engagement and improves the service that users get.
The technology is pretty mature. What has changed is the consumer has come to expect a native/iphone/app level of ease and cleanliness in everything they interact with. This includes what was previously the realm of the large institutions with every service siloed into its own portal. Now consumers want and expect to be able to do everything from one interface, which is very doable.
Blockchain technology shows great promise for the enterprise and many anticipate it could transform the way business is conducted around the world. As a distributed ledger shared via a peer-to-peer network, blockchain provides an up-to-date ledger that reflects the most recent transactions or changes. This eliminates the need for trusted third parties such as payment processors. For enterprises in the fintech/finserv space, this means safer, faster and cheaper transactions on a global scale, making blockchain an industry game changer.
Blockchain technology can provide a permanent, secure tool that makes it easier to create cost-efficient business networks without requiring a centralized point of control. With distributed ledgers, virtually anything of value can be tracked and traded. It allows securities to be settled in minutes instead of days. It can be used to help companies manage the flow of goods and related payments or enable manufacturers to share production logs with OEMs and regulators to reduce product recalls.
In my view, biometrics will play a key role in the very near future when it comes to all onboarding and acquisition processes: account opening, loans and product acquisition, document signing etc. Biometrics will make the digitalisation and streamlining of these processes easier as the technology evolves.
applied for the sake of convenience. With voice signature technology, customers can now speak on the dotted line, improving the overall consumer experience with easier enrollment and faster processing. Voice biometrics, in particular, are highly reliable with a 99.99% success rate, but the fine-tuning of a voice authentication system impacts the degree to which it is foolproof. Organizations must weigh their desired levels of security and convenience, which are in an inverse relationship along a sliding scale.
One trend with financial technology I think we’ll continue to see are “un-banking” technologies. These are technologies that break from what traditional banks and financial institutions do and instead offer a more user-friendly experience. We’re seeing this in student loans, mortgages, investments, and other financial products already.
These financial products have traditionally been so complex that many consumers don’t completely understand how they work, what the costs are, and how to get a better deal. It’s no wonder Americans are frustrated with large, traditional financial institutions.
Now we’re seeing a lot of tools that help everyday people understand what’s happening with their money and how they manage it. These technologies hopefully result in more money in American’s pockets at the end of the day.
For example, SoFi recently stopped using the FICO credit score and became the only major lender [they] know of that does not use the score for any lending. Why? Because FICO isn’t transparent.
While more banks seem to be jacking up fees, Simple doesn’t charge anything for their accounts. Simple has also integrated budgeting directly into their accounts to make it easier for Simple users to achieve financial goals.
– Andrew Josuweit, CEO at Student Loan Hero