The financial technology (fintech) sector is red-hot, as reported by Deloitte. Owing to the digital trends in financial services, which include the increased popularity of mobile and cloud computing, more people have come to prefer managing their business finances from the cloud. In this regard, what fintech trends in 2018 can we expect to see aside from the growing adoption of fintech products and investments?
According to KPMG, the Australian fintech ecosystem is becoming increasingly diverse, with the number of fintech startups increasing from less than 100 in 2014 to 579 companies in 2017. We can say that the landscape of fintech in Australia is ready for further growth.
Here are several things that we can watch out for with regard to the fintech industry:
1. Increased Testing and Use of Blockchain Technology
Without a doubt, more financial institutions will look to experiment with blockchain technology. Blockchain, a decentralized digital ledger distributed across users, allows for secure transactions that are reliable and trustworthy. This technology is expected to create efficiency in various industries, such as trade finance, regulation and audit, and healthcare, among others.
In 2017, IBM announced an initiative with five financial institutions to develop a blockchain-based global trade platform called Batavia. By 2020, we will most likely see more banks and financial institutions investing in similar technologies, with as much as 20 percent of trade finance incorporating blockchain.
2. Cryptocurrency and Initial Coin Offerings (ICOs)
Cryptocurrencies have dominated the news in the past 12 months, and we might see more of that in 2018. While Bitcoin experienced a 28% slump this week, there still are several other groups who have launched ICOs, giving financial professionals and investors more options.
3. Rise of Digital Payments
In many countries, near-field communication (NFC) has transformed the way consumers make payments. Many establishments now allow their customers to pay by holding up their mobile device to a point-of-sale (POS) terminal.
With more options for contactless payments springing up, it will be interesting to see where this technology is headed. (If you want to learn more about mobile wallets and tips on how to use it securely, read this guide.)
4. More Applications for Artificial Intelligence (AI)
Previously, we have covered the implications of AI in the accounting industry. In the coming years, we can expect to see more applications for this technology in the finance and accounting industry.
For example, machine learning, big data, and Internet of Things (IoT) present an unparalleled opportunity for the banking industry. These technologies will enable data scientists to learn more about the behaviours, responses, and expectations of their banks’ customers. In turn, more personalised products can be developed for specific demographics.
5. Cybersecurity is a Major Opportunity
All businesses and governments know why cybersecurity should be the top priority. With the outbreak of the WannaCry ransomware last year, we have come to realise how costly vulnerability is to businesses. For instance, the high-profile security breach to Equifax and Maersk did not only impacted their financial performance but also damaged their reputation.
In 2018, cybersecurity and cyber risk mitigation will continue to be the focus of many organisations. We can expect investments in cybersecurity to continue to rise.
This year, stay ahead of the competition by keeping abreast with fintech trends in 2018. One way to drive your business forward is by taking the opportunity to leverage your staff’s skills and expertise. Partner with a reliable accounting outsourcing partner who will take care of your numbers so your staff won’t get bogged down by bean counting and number crunching.
Learn how D&V Philippines provided different accounting and business solutions that helped Tridant, a consultancy company based in Australia, achieve their goals.