Despite several transformative innovations in digital technology, experts believe that the digital divide is still substantial, especially in the financial vertical, where the banks and other fintech institutions are experimenting with modern advancements. With fierce competition for growth, increased cost of provisioning efficient customer services, and these digitally divided ends, fintech businesses and startups must learn to leverage technology in more ways than one.
While you are in the process of learning, this article helps you understand how modern fintech startups can fuel innovation by utilizing advanced technologies in the financial services industry. Let’s start with the basics:
State of the Global Fintech Market
The fintech market is one of the fastest scaling markets, estimated to reach $332.5 billion by 2028, growing at a CAGR of 19.8% from 2022 to 2028.
As for Fintech startups, recent surveys demonstrate that by November 2021, there were 10,755 financial startup services in the US alone.
While most of the fintech application development services are based on existing technologies such as Artificial Intelligence and Machine learning (AI/ML), Internet of Things (IoT), Big Data analytics, etc., the prominent elemental startups of Fintech have progressed with modern cutting-edge technologies such as Blockchain, cloud computing, serverless computing, low-no code development and more.
But what about the Fintech startups that are yet to learn about technology leverage?
This article tells you all.
Before we hop on to the section where we talk about multi-purpose technology applications for fintech startups, it’s essential to understand which technology fits best for your business niche.
How Fintech Startups Decide on Appropriate Business Technologies
Choosing the appropriate tech stack and technologies is never a cakewalk. Although every fintech application development is based on various tech stacks, the aim is to surpass existing fintech competitions.
To simplify the process of choosing the appropriate technologies for your financial startup, check out the crucial factors required:
Decide on an appropriate niche
Whether it’s digital wallet or banking services, every niche has fixed requirements. Therefore, choose one niche that aligns well with your business goals.
Check for regulatory compliance
Every region carries its own set of rules for financial standards. Offer solutions that comply with your country’s financial protocols and procedures.
Tech stack that depicts relevancy
It is also essential to identify your audience’s nuisance and demands. Choose a tech stack or technology that is relevant to your business services and is convenient to your end users.
Mindful of UI/UX and application architecture
If you are looking for fintech software or application development, select a technology that fits your design requirements and the scalability of your product.
Take development guidance
It is always helpful to take technical guidance from development experts in the fintech industry who can offer insights based on your project.
One additional bonus tip is to analyze your competitors. Learn from their product development and scalability graph to understand what technology can accelerate your financial growth.
Now, this was the general procedure of how fintech startups usually choose their technology niche. Coming back to our central discussion of how to utilize the advanced technologies to stand apart in the market.
Five Trends To Leverage Modern Technologies For Fintech Startups
The biggest challenge in a financial setup is to harness the changing landscape of technology and services to the benefit of your startup. Therefore, here are five fintech trends that depict how entrepreneurs can leverage modern technologies to succeed in the financial space.
AI and ML (Always a Trend)
Many studies have established that AI/ML technology can generate around $1 trillion in additional revenue for global banking and fintech services. Financial startups must adapt to the “AI-first” mindset if they are looking to invade the technology sector. AI technology comes with personalized banking and financial services, custom products, automatic transactions, chat interfaces, analytics, location, sensor-based applications, and so much more.
AI/ML-based applications development involves smart processes, fraud detection, insightful databases, and whatnot to keep you ahead of the game. AI has an unbelievable potential to fuel any fintech business, which is why the technology giants keep investing in AI-based solutions. For instance, Robotic Process Automation or RPA in finance has gained a lot of popularity and it has been adopted by many leading companies.
Blockchain (The newly established protocol)
Yes, the banking and fintech sector has been one of the early adopters of blockchain technology and services. As a startup, fintech businesses can make numerous service advancements using blockchain solutions. With Blockchain, each transaction is encrypted with zero possibility of penetration. Your database is secured and authorized; your network stakeholders will always be updated every time new data is added, and you can even trace the original transaction with multiple foot payments. These benefits show that blockchain technology is not just an advancement but a necessity for fintech startups.
RegTech solutions (The rise of fintech era)
RegTech stands for Regulatory Technology Solutions that can be put to good use with recent fintech innovations. Financial institutions utilize RegTech to create automated solutions and control reporting, compliance, and monitoring processes.
The benefit of RegTech for startups is that these solutions are cost-effective, fast, and simple for managing fast data. It allows a speedy pre and post-trade transaction consent associated with financial companies, customers, and regulators.
Internet-of-Things (Never growing old)
IoT will always be a coming age of technology composed of three parts: wireless networks, smart sensor systems, and application and operating systems. Moreover, the IoT sensors and IoT-based communication systems in fintech startups help proliferate, creating a dense net for devices to connect intelligently.
In banking and fintech business, IoT-based inventories run on the linkage of IoT and Blockchain to make sure that the accounting records align with the actual transactions, thus creating a new system of trust and transparency.
Open source SaaS and serverless (Breaking the entry barriers)
Speed and expandability are two features of progressive startups and businesses, especially in the times of the current digital economy. Open source SaaS (Software-as-a-Service) is a must-have valuable technology for every fintech startup.
SaaS allows businesses to leverage modern software solutions without actually maintaining the systems. On top of this, the serverless framework eliminates the need for owning a server for startups. A serverless architecture minimizes the operational costs and costs linked to executed software code regardless of your business requirements.
This means you can scale quickly using free-to-use source codes and get a head start with your fintech application development.
The five fintech startup technology trends discussed above can be integrated and interlinked to financial businesses, giving a significant boost to the industry. The fintech experts suggest utilizing these technologies mandatorily and wisely using a strategized planning development process.
Speaking of which, it is always advisable to seek experienced technical guidance from a reliable fintech application development company, especially if you have just started the business. Now go ahead and start your entrepreneurial journey with these technology trends.