Fintech refers to the intersection of finance and technology. By many accounts, fintech is becoming increasingly popular and is changing the landscape of investment management. According to the CFA Institute, advancements include the use of Big Data and artificial intelligence (AI). Fintech also involves machine learning to evaluate investment opportunities, optimize portfolios, and mitigate risks. Let’s explore some of the trends in fintech for 2020.
Large Investments Into Digital Transformation
Banks have invested $1 trillion in technology to get into the digital sphere. Why? Mainly to better align themselves with consumers’ increasing focus on digital and mobile, thus improving economic performance to shareholders.
Traditional banks will continue to feel the pressure from digital-only banks that offer basic services in the most simplified manner because of electronic documentation, real-time data, and automated processes.
RegTech Will Help Banks and Lenders Comply With Regulation
Financial institutions will benefit from AI-powered RegTech monitoring, reporting, and maintaining compliance with large volumes of regulatory data.
Broadminded Lenders Use Algorithms to Benefit Lenders and Borrowers
Credit scoring algorithms will not only help financial institutions optimize default and prepayment rates, but also streamline the application process, allowing for leaner staffing and enhanced customer experience.
Fintech Regulation to Expand
Financial authorities will continue prioritizing the challenges in digitization and take actions implementing a global approach to this new era.
NFC Payments Grow to Replace the typical ‘Wallet’
Globally, NFC technology will grow as specific governments try to replace conventional technology to make payments
Cryptocurrencies Start Long-Term Diversification
Cryptocurrencies, such as bitcoin, allow investors to diversify by serving as a form of alternative investment. So, opportunities will grow to diversify with non-cryptocurrencies and diversify among cryptocurrencies.
Fintech Is Banking on the Future of Computing
The financial services sector believes that quantum computing can not only help supercharge its products and profits but also create problems for data security.
Expansion to Decentralized Apps (d’app) for Payment
Progressive innovators will seek to apply current principles (fully open-source, rewards contributors, runs without a central authority, and blockchain technology) to a variety of online services they believe could be built in the d’app format.
AI voice technology will allow for an increased amount of transactions, including smarter chat-bots for customer service, personalizing individual services. Banks may even consider using an on-site AI robot for self-service, rendering their back-office more efficient while reducing fraud and security risks.
The research suggests that these 2020 trends in fintech are here to stay. Nowadays, bank firms are looking for people with a combination of data science and finance knowledge to analyze massive amounts of information while interpreting their trends. If you’re in the investment management industry, continue to educate yourself on these trends in fintech so you can learn how you can leverage them.
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