How Tech is Shaping the Future of Finance?
Security has been one of the main issues that all stakeholders have had to deal with as financial services have transitioned from in-person contacts to virtual ones. A worrying increase in cybercrime has been observed, and many businesses are now gradually adding ransomware payments to their regular running costs. Due to the difficulty of duplicating or hacking biometric markers, there is a growing emphasis on biometric solutions as a means of achieving the greatest levels of security. Although fingerprints have traditionally been the preferred form of identification, contactless biometrics technologies are also receiving interest due to public health concerns.
Financial firms have historically fiercely guarded client data to maintain their competitive edge. To accomplish this, banks frequently restrict access to data while also frequently denying customers full control over their data. With more data protection rules allowing clients to access and move their data as they choose as well as increased collaboration between fintech startups and traditional banks, the open banking idea has recently experienced a rebirth. Governments and their regulatory bodies throughout the world have been playing catch-up with new laws and regulations to cover each innovation as fintech companies have continued to build solutions on new technology. As a result, the countries in which fintech companies operate now have a patchwork of regulations to contend with.
In contrast to the early days when cryptocurrencies were only used sometimes, conventional financial services firms began adopting cryptocurrencies more frequently in 2020. For instance, PayPal declared in November that all Americans would soon be able to purchase, store, and trade cryptocurrencies on its platform. More companies will start accepting cryptocurrencies as more people start using them. Since there are some limitations to cryptocurrencies (such as security and volatility), the market will reward businesses that can offer solutions.
Cash is still alive. Yet. However, it is undeniably on the decline as society moves away from face-to-face interactions and as mobile payment options grow more prevalent. Mobile payments are now a top concern for the financial services sector, from tiny startups to industry behemoths like Apple and Google. Money transfer solutions are widespread, yet difficulties with international transfers still exist. While other fintech businesses have attracted significant sums of money and Transferwise raised $319 million at a valuation of $5.5 billion, there is still a long way to go before foreign transactions are as straightforward as domestic ones. The opportunity in mobile payments is growing along with the size of the remittances market.