The Evolution of Fintech: Key Trends Shaping the Industry
Published: 2023-12-11 10:19:48

Financial services have seen a great transformation in recent years, driven by the rise of fintech. Fintech has disrupted traditional financial processes and modernised the way we manage money, invest, and complete transactions. As we navigate this ever-changing landscape, it’s important to understand the key trends that are shaping the fintech industry.

Here are some notable trends that have emerged.

## Mobile-First Approach

The last decade has seen a surge in smartphone usage becoming the normal, go-to way to transact finances. Mobile banking apps, payment apps, crypto exchange apps and other investment platforms have skyrocketed in popularity. According to [a survey by YouGov](https://www.ukfinance.org.uk/news-and-insight/blogs/digital-banking-experience-trends-2022), 85% of 18-24 year olds and 79% of 25-34 year olds are using mobile banking apps. Mobile transactions can also be completed through smartphone wallets, allowing for contactless payments in shops or while commuting. According to a [recent study](https://maprocessing.com/mobile-pay-predicted-to-overtake-cash-by-2030/) by IEEE, approximately 70% of surveyed tech experts said that they believe mobile payments will overtake cash and cards by the year 2030.

Check out a mobile payments project we completed E-Send, where we implemented 3rd party APIs to enable money remittance between different countries.
If you would like to discuss building a Fintech app, get in touch with us today.

**Artificial Intelligence (AI)**

AI and machine learning are revolutionising fintech in several ways. Chatbots, robo-advisors, and AI algorithms improve customer efficiency, customer engagement, fraud and risk detection, as well as streamline financial services. These technologies are enhancing efficiency, reducing costs, and personalising the user experience. AI can also fast-track investment decision-making. Manual analysis of market trends, financial statements, risk assessments and other data is time-consuming and error-prone. AI can enable financial professionals to efficiently process large datasets, discover hidden patterns, and formulate valuable insights.

Read more about how AI-powered tools are transforming businesses

**Open Banking**

Open banking is still in its infancy but is expected to grow. These initiatives are reshaping the financial industry by permitting third-party providers to develop new financial products and services for customers and partner up with existing banking providers to offer interesting alternatives. Referring to a report by [Polaris Market Research](https://www.polarismarketresearch.com/press-releases/open-banking-market), open banking is predicted to reach a valuation of $128.12 billion by 2030. Furthermore, Finastra’s “[Financial Services: State of the Nation Survey 2022](https://www.finastra.com/viewpoints/research/finastra-financial-services-state-nation-survey-2022)” showed that 56% of surveyed financial users indicated open banking as a “must have,” up from 45% in 2021. This trend fosters competition and encourages innovation, as fintech startups and traditional banks collaborate to give customers more choices.

See how we are leveraging open-banking for ChurchDonate

**Financial Inclusion**

Underserved populations, such as those in rural areas, can be better served by Fintech. Mobile banking and apps are making it easier for people in remote areas to access financial services, transact money, and build credit histories. This trend in financial inclusion goes hand in hand with the new open banking innovations, making financial services less rigid and more flexibly aligned with modern living.

## Sustainability and ESG Investing

A sustainable financial system creates, values and transacts financial assets using methods that serve the long-term needs of an inclusive, environmentally sustainable economy.
Environmental, Social, and Governance (ESG) investing is gaining traction in fintech. Investors are now more interested in aligning their portfolios with ethical and sustainability goals. Fintech platforms are now offering ESG investment options and processes that can assess the environmental and social impact of investments. An example of this is Treecard, who offer a Mastercard® debit card made of sustainably sourced FSC wood and recycled plastic bottles, and uses the majority of transaction fee funds to plant trees.

## Regulatory Sandboxes

Regulatory sandboxes are environments where fintech startups can test their innovations with limited regulatory restrictions. Such sandboxes permit new companies to test and develop their products and services more freely. They can expect a relaxing of specific legal and regulatory requirements, but it will include safeguards to contain the consequences of failure and uphold the safety and soundness of the financial system.

**We Can Help**
Fintech is evolving quickly, and aligning with new and exciting innovations to make the world a safer place to save, invest and transact money. We can help your Fintech company explore interesting ways to provide optimal support to customers and gain a robust reputation in the industry. If you’d like to learn more about building a Fintech app, or the [fintech app development](https://www.ficode.co.uk/industry/fintech-app-development) cost, contact us today.

## This post originally appeared on Ficode website, and we republished it with permission from the author. Read the full piece [here](https://www.ficode.co.uk/blog/the-evolution-of-fintech-key-trends-shaping-the-industry).