Prior to the Covid-19 pandemic, the majority of UK companies employed an on-site workforce to conduct the day-to-day running of their business, with only 27% of employees having worked from home at some point in 2019, on average.
Fintech had a great year in 2018, with dozens of partnerships being struck between traditional banks and Fintech companies, such as HSBC and Avant, Barclays and MarketInvoice, and Radius Bank and Mantl.
Big organisations started to copy Fintech innovations, such as Monzo’s in-app freeze and unfreeze card feature.
So, where might Fintech go in 2019?
A recent study conducted by Splendid Unlimited suggested that just 22% of people in the UK had heard of the concept of ‘open banking’, showing that the understanding of it is extremely low. It also appeared that the first impressions of open banking were generally negative, although when offered more information impressions became increasingly positive.
The introduction to open banking at the start of 2018 appears to not have increased trust in financial services, with the study also finding that 26% of people believed the concept was merely a way for banks to share customer data, although this seems likely to change in 2019.
Greg Palmer of Fintech Futures has stated that ‘open banking can be a very positive thing for the banks that adopt early, and there is long-standing momentum behind it. It’s good for consumers, good for innovators, and appealing to regulators. That’s a combination that can’t be resisted.’
Another prediction is that artificial intelligence (AI) is likely to play a large part within the Fintech industry this year, not necessarily as a product itself but incorporated into new and existing technology, with Peter Renton predicting that:
‘Now, many lenders, both online and traditional banks, are clamouring to incorporate AI into their underwriting with the big challenge being it needs to be explainable to consumers as well as regulators. Many lenders (more than 10) will have this in production by the end of 2019.”
Customer convenience is key
For Fintech companies, making financial experiences more convenient for customers is crucial – and that theme remains an essential one this year.
Businesses will continue adopting technologies which streamline the customer experience and make managing your money both simple and secure.
At Currencies Direct one of the innovations we have on the horizon is the introduction of a passwordless login feature on our app, making it even easier for customers to manage their accounts on the go.
According to Currencies Direct Head of Digital Hardik Shah: “Passwords are frustrating. For most of us it’s hard to create complex, unique passwords that are also memorable. Our aim is to replace passwords with alternative authentication techniques that are incredibly-fast and extremely secure, while ensuring customers are authenticated and sensitive data remains protected. At the moment we have to remember hundreds of passwords, but the technology exists to move beyond this and make it more convenient for users to engage with content and services in a secure environment.”
Points and loyalty to become more of a currency
Despite indications that we’re moving towards being a cashless society (with Reserve Bank of Australia Governor Philip Lowe stating last year that cash is becoming a ‘niche payment instrument’) getting rid of paper currency is still a long way off.
However, other factors are expected to assume the role of currency in the year ahead.
Bob Legters, Chief Product Officer of Banking and Payments FIS has noted:
‘The new currency that we will see take shape in 2019 is loyalty. Strides are being made in the loyalty space that will allow people to redeem their rewards right at a point of sale, whether it’s saving money on gas or getting a free item at a retailer. On the back end, loyalty processors will spend less time on marketing and recordkeeping and will shift their focus toward technologies augmented with real-time settlement.’
Banks to get creative with their real estate
While it’s highly unlikely that bank branches will become obsolete in the next year, banks are becoming increasingly creative with their real estate, with an ever-rising number of customer interactions performed digitally.
‘There is undoubtedly a shift in consumer behaviour when it comes to in-branch activity. FIS’ 2017 PACE survey found that 72% of all bank interactions are now done digitally. In the year ahead, we will continue to see a surge in direct-to-consumer banks as financial institutions tap into consumer demand for higher-interest deposits and convenient, easy-to-use online services.’
Where do you think Fintech will go in 2019?