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FinTech

6 Trending Technologies Used In FinTech

yokesh sankar

Yokesh Sankar October 13, 2022 8 mins

Trending Technologies Used In FinTech

With the constant development of technological breakthroughs, the FinTech business has become the world's fastest-growing sector. During the pandemic in 2020, people shifted to more convenient ways to meet their financial needs, giving the digital transition a whole new level of attention. The future of the FinTech business is optimistic due to the increasing number of start-ups, the continuing expansion of digital infrastructure, the penetration of mobile phone users, and in the overall, simplifying financial processes throughout multiple industries.

The seven key technologies will drive business model reinventions while shaping the competitive market of the financial industry over the next ten years. Technological advancement and innovation are the core elements of fintech development, and they will continue to drive innovative business models in financial services. Over the next decade, the following seven important technologies will drive fintech development and shape the competitive landscape of finance


Six key technologies will drive FinTech development

1. Blockchain Technology Is Disrupting the Financial System

Blockchain Technology Is Disrupting the Financial System

A blockchain is a distributed database shared by computer network nodes. The blockchain, like a database, stores information electronically in digital format. Blockchain technology is best known for its critical role in maintaining secure and decentralized transaction records in cryptocurrency systems such as Bitcoin.

A blockchain exists in the form of an immutable block. You may use this technology to create the entire FinTech app ecosystem. Blockchain technology development has the potential to transform a normal financial transaction into a completely transparent procedure based on safe and efficient transactions. With the right application of blockchain, you can build a FinTech ecosystem that will completely revolutionize finance. Financial transactions on the block do not require the use of an intermediary, and peer-to-peer networks, high-speed trade, and complete transparency are all possible. However, the application of blockchain in finance can do more than just facilitate transparent transactions. Due to blockchain technology, users will eventually be able to regain complete control of their wealth, paving the way for a fully democratized financial system.


2. Artificial intelligence will be driven by massive value creation

Artificial intelligence will be driven by massive value creation

Artificial intelligence is the simulation of human intelligence processes by technology, particularly computer systems. Artificial intelligence is a system or machine that works by mimicking human intelligence and can be enhanced over time based on to provide important insights, financial firms may utilize artificial intelligence to analyze and manage data from numerous sources. These innovative findings help banks overcome the obstacles they face on a daily basis when offering services such as loan administration and payment processing. In the financial sector, AI powers several technologies aimed at increasing security safeguards. Bank apps, for example, require facial or fingerprint recognition for access. This is made possible in large part by artificial intelligence. AI applications include the following:

  • Systems of expertise
  • Natural language processing
  • Recognition of speech
  • Machine perception

The advantages of AI for FinTech include the ability to handle data and develop data models more effectively than people, while the drawbacks include a lack of depth of understanding, questionable diversity inclusion, and financial regulations.


3. Cloud computing improves security

Cloud computing is a revolutionary technology that uses the Internet to store and manage data on remote servers while also allowing access to that data through the Internet. The user can utilize a remote control to operate this type of equipment. Cloud computing customers do not own the physical infrastructure. They borrow it from a third party.

Cloud computing and the essential aspects of cloud services:

  • Self-service on demand
  • Access to a large network
  • Pooling of resources
  • Quick elasticity
  • Several features contribute to effective server utilization
  • Cloud Services on Demand
  • Dynamic scalability
  • Technology for Virtualization

Cloud computing is a critical enabler for financial firms. This allows financial businesses of all sizes and types to integrate scalability and flexibility into their business models, providing agility and staying competitive in rapidly changing markets. Cloud computing can also help financial firms increase security, adapt to severe compliance requirements, and simplify conventional, complicated infrastructure. FinTech startups do not need to support legacy systems and instead focus on innovative technologies such as the cloud, mobile, and blockchain.


4. The Internet of Things will drive a new era of financial trust

The Internet of Things (IoT) is a network of physical objects (or "things") that are embedded with sensors, software, and other technologies that enable them to connect and share data with other devices and systems, through the internet. Finance was one of the first industries to fully embrace the digital revolution. The use of real-time data is a critical component of the financial industry. To address these demands, the industry is turning to the IoT and real-time analytics. It is difficult to imagine life without analytics, which connects and evaluates customer purchasing behavior using customer data.

However, this is one of the reasons why financial institutions are so enticing to hackers: once the security is breached, they have instant access to consumer financial data.

Some of the above-mentioned common security concerns for the finance business are as follows:

  • The Risk of Sensitive Data
  • A Financial Scam through Email
  • Mobile Banking Malware
  • Ransomware and DDOS attacks

5. Open source, SaaS, and serverless will lower entry barriers

SaaS (Software as a Service) is a way of providing applications as a service over the Internet. Rather than installing and maintaining software, just accessing it through the Internet frees you from the burden of managing complex software and hardware. Open SaaS refers to SaaS that is built on top of open-source code. Like SaaS apps, Open SaaS is a web-based program that is hosted, supported, and updated by your service provider. Software as a Service (SaaS) allows businesses to access cloud-based technology rather than downloading software, leading the FinTech industry and allowing the financial services sector to stay competitive.

SaaS reduces infrastructure costs for banks, phone companies, insurance companies, and other payment organizations while also providing the following advantages:

  • End-to-end cost reductions
  • Data security
  • Scalability
  • Agility

6. No-code and low-code will completely reshape application development

No-code development platforms (NCDPs) and low-code platforms (LCPs) enable programmers and general users to create programs using graphical user interfaces and configurations. The combination and application of component reuse and assembly in software engineering, DSL (domain specific language), visual quick development tools, customizable workflow process orchestration, and design thinking is referred to as NCDP. The development of cloud computing, DevOps, and other technologies that handle difficulties such as containerization, inflexible scalability, and maintaining high availability computer systems is heavily linked to NCDP development.

NCDPs are frequently used by businesses to speed the development of cloud-based apps while maintaining business strategy coherence. This is extremely beneficial for financial institutions and fintech startups that need to adapt swiftly to market movements.


Takeaway

These six major technologies and trends are increasingly intertwined and integrated, providing significant impetus to fintech and financial industry innovation. It is presently a specialist financial services sub-sector that excels at exploiting technological advancements to develop apps, create value, and shape the competitive landscape Traditional financial institutions will need to organize their vast resources in the future to keep ahead of the oncoming wave of financial industry disruption.

Author Bio

yokesh sankar

Yokesh Sankar

CO-Founder

Yokesh Sankar is the co-founder and chief operating officer of Sparkout Tech. He believes in changing people's lives for the better and developing the skills they need for success, and that the software industry has endless possibilities to streamline virtually any industry you can imagine. In addition, he is also an advocate for the adoption of blockchain technology, helping businesses of all sizes to realize their visions through this revolutionary technology. He will be sharing everything he has learned over the years working in the industry, and he hopes to open out as much knowledge about the software industry as he can.


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