Rising expectations in the field of banking, new demographics, new markets, and tough competition – FinTech companies have been struggling with many challenges within the last few years. Will the new decade be the age of stabilization or even more obstacles?
Developing a successful application in the banking sector has always been hard work but now FinTech startups face even more problems. Tech-savvy customers are more and more demanding, they expect the app to be smooth, innovative and easy to follow. This is where a great challenge in app development comes in.
The financial technology revolution is now spreading around the globe and there are some trends to follow. Let’s check out the latest technologies and ideas that have the potential to become 5 top trends in FinTech app development in 2020.
Cybersecurity
Let’s start with what’s obvious. The banking sector has been always vulnerable to fraud, espionage, identity theft, and money laundering. As time goes by, people have spent more and more time trying to keep their data safe and secure, especially when it’s sensitive data. According to reports, every time a financial institution suffers from a cyber attack, the costs are estimated at approximately $1.8 million.
The current trend indicates that FinTech companies while developing apps should invest more in cybersecurity strategies. They should be always prepared for a potential cyber attack. Mitigating the implications after breaches is also an option. Most FinTech institutions do their best to update their existing systems and frameworks with the newest solutions: biometrics, multi-factor authentication, etc. It’s a great step towards customer trust and loyalty, as well as their security which is of utmost importance.
Blockchain in banking apps
The latest Accenture report shows that around 90% of all bank executives consider blockchain to be a potential way to improve app security. Among the others, Bank of America and JP Morgan Chase are now ready to improve their efficiency, as well as reduce costs, with Blockchain technology. Digital money may be the answer for FinTech companies that need to enhance existing processes and systems. While Facebook is working on Libra payments, Apple Pay is developing and Ven, a Binance’s open Blockchain project, is being brought to life, the technology just cannot be ignored.
The popularity of Blockchain in FinTech is growing all the time and the market is still in need of having new digital-money payment options. As Blockchain’s most characteristic feature is decentralization, full data transparency could be achieved. Thanks to asymmetric encryption and data immutability, it’s also more likely to prevent fraud.
Blockchain has been in the center of our interest since BinarApps has been established. So far we have developed a platform for cryptocurrency exchange and a taxi ordering service based on cryptocurrency payment. Both of them are characterized by very high-security level. In the future, we plan to launch Blockchain projects not only for FinTech, but also eHealth, InsureTech, and office administration.
Big Data processing
This trend is also a result of a higher security risk FinTech companies have to face every day. The importance of fraud prevention is hectic and using Big Data for its prevention might be helpful. As a consequence, Big Data is expected to be even more leveraged in 2020. More and more FinTech companies declare that Big Data is crucial if you want to identify weak spots in your security system. Possible security threats in online banking may also be identified in a more effective way. What does the trend actually include? It’s all about gathering and structuring customer data so that building common patterns is possible.
Big Data includes all the structured and unstructured customer information. After it’s gathered, the system processes it with specially designed algorithms. Building patterns, on the other hand, supports fraud detection. Any suspicious activity is immediately alerted and the FinTech company is able to offer more personalized and safe products to their clients.
For one of our Clients, BinarApps’ developers have been developing and implementing solutions for Big Data analysis. The platform is able to evaluate data provided by big companies; the goal is to survey the employees and come to the right conclusions. The project has been a success and we continue to develop new features.
Biometric identity for more security
Again, a security issue comes up. Biometric identity is now one of the hottest trends in FinTech app development and this only highlights the importance of mobile security. Many tech-oriented startups have already implemented biometric verification on mobile. The most common solutions are fingerprint authentication and voice recognition. Also, searching for transactions, reporting stolen credit card or transferring money is possible with the help of voice commands. FinTech experts say that biometric identity on mobile will soon replace passwords completely. As of 2020, mobile banking is considered to be safer than online banking so new solutions are very likely to come.
Open API is king
Open API standard has been widely expanding within the last months and it’s expected to expand even more in 2020. The main idea behind such growth is a need to create a comprehensive marketplace for FinTech services. Joining the system is not required but it might be soon expected by the customers who appreciate the data transparency. They will be able to view the finances, use different payment methods and access convenient tools provided by different providers. Such marketplaces have recently become quite popular in Europe and Asia and very soon we’ll see if this is a major trend to follow.
In the Member States of the European Union, open API and Open Banking are a direct result of the PSD2 Directive. Now it is mandatory for banks to open their APIs to Third Party Providers (TPP). It’s the best time for FinTech companies to launch their products and improve financial services on the European market. At BinarApps, we had the opportunity to be a part of creating the Polish API Standard that regulates the architecture of APIs for Polish banks. As a result, we have extensive knowledge backed up by experience on how to properly comply with the PSD2 regulations.
How not to get lost?
The nature of trends is that they come and go. FinTech isn’t free from that paradigm. How to decide which ones are worthwhile and which are just a fad that will quickly pass? Getting a technological partner who stays up to date with innovations is crucial for steady development. Talk to our consultants and check what we can do for you!
April 7, 2020
