Fintech online banking

B2B fintech trends for 2020

Fintech is transforming the way modern businesses operate. Technological solutions within finance are improving productivity, efficiency and delivering customer experiences to be rivalled by other industries. As the growth of the fintech industry shows no signs of slowing down, trends within tech and finance are constantly evolving.

Within the B2B landscape, companies can discover and implement new ways of conducting business that will change the way they perform. The popularity and potential of the fintech industry bring the appearance of new competitors striving for market share and customer loyalty. Ensuring your business is ahead of the competition comes down to keeping up with trends in financial technology that can deliver an exceptional customer experience and streamline operational processes.

Here are five key trends taking the B2B industry by storm in 2020:

Digital-only banking

Digital banks aren’t a new thing. Monzo paved the way for these services and have been joined by a number of big industry players. COVID-19 added stress to people’s finances and the need to have control over your income, savings and outgoings. Restricted access to bricks and mortar banks during the pandemic spurred a lot of people to use online banking. Digital-only banks offer easy access to money, no hidden fees, better interest rates and additional benefits like saving support and international transactions and withdrawal for no added cost. Banks like Revolut are offering the chance to buy and exchange cryptocurrencies; giving the full digital experience.

It all sounds great but there are the obvious concerns with financial fraud and cybersecurity. Sometimes it’s more reassuring for customers to have access to a physical store and employees that can support you with issues, rather than via a live chat or over the phone. It will be telling over the next couple of years whether digital-only banks are secured on the market or whether traditional banks with a hybrid approach will remain top.

Fraud detection with artificial intelligence

Artificial intelligence (AI) is making moves in payment fraud detection. Fraud has become highly complex and difficult to detect for the average person. Acquiring and manipulating data can result in contacting personnel without consent and damaging reputation. Artificial intelligence is increasingly being used to monitor payments and transactions and any irregularities that appear. 

Within the know your customer (KYC) process, AI can automatically verify the validity and authenticity of documents through intelligent algorithms. Transaction monitoring can also be optimised using artificial intelligence. Machine learning can be used to detect patterns in historical transactional data and apply them to real-time transactional data. This ensures banks can identify and raise potential fraudulent activity as and when it happens to improve the efficiency of the process. Law enforcement can be informed earlier in the process which increases the likelihood of financial crime being prevented.

Investments and digital partnerships 

Often established players in the B2B fintech market may feel threatened by startups shaking up the industry. Fintech organisations in their infancy build technological innovations into the fabric of their businesses. They benefit from improved and efficient operations as well as rapid growth due to bringing a unique offering to the market.

Established fintech organisations have a lot to offer startups too. Brand loyalty and a strong reputation are to be envied by new industry players that need to earn the trust of consumers to gain a firm foothold on the market. With a lot of knowledge, expertise and innovation to offer one another, startups and established fintech firms are joining forces to make an even bigger splash. Established players are investing in digital startups to help business growth. Older market players are partnering with digital startups to bring technological innovation to large audiences.

Innovations in payment and transaction

Fintech enables consumers to pay however and whenever they want through payment innovations. Consumers can use online payments, mobile payments and contactless payments to pay for goods and services as efficiently as possible. Mobile wallets are growing in popularity with physical wallets possibly phasing out as consumers become cashless.

As with any online payment, security has to be paramount for consumers to feel safe. Sophisticated verification software including biometric technology is being developed and utilised more than ever before to protect users’ personal information. Online payments are trusted among younger generations who have grown up with technology; growth will lie in older generations like Gen X and Gen Y who are often sceptical about the safety and reliability of digital transactions.

Ever-increasing fintech regulations

The fintech industry is one of the most heavily regulated industries in the world. As financial technology relies on the personal data of its users, there are a number of regulations that dictate the collection, storage and use of personal intellectual information (PII). Particularly in the prime-time of digital banking, consumers must know who their data belongs to, who it can be accessed by and how they can stay in control of their sensitive information. Cybersecurity threats are becoming more advanced and complex, with the average consumer being unable to detect when their personal data has been misused.

In the US, there isn’t one regulatory body that dictates the regulation and requirements of the financial industry. Fintech companies must adhere to regulatory requirements on a number of levels to ensure they’re compliant which brings with it a host of challenges. In the UK, fintech companies are governed by the Financial Conduct Authority (FCA) which is deemed to be one of the most progressive in the world. The FCA has the responsibility to increase regulation across fintech companies to ensure cybersecurity, anti-money laundering and data protection laws are met.

B2B fintech has seen a number of trends during 2020 that are set to continue over 2021 and beyond. These trends bring innovation to the fintech industry and transform the efficiency, productivity, and security of consumer behaviour and business operations. The collaboration between fintech businesses will further the rapid growth of the fintech industry over the coming years to transform financial services.

Written by: Laura Greenhalgh
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