Financial technology is evolving, and various technologies make it easier to invest and even manipulate your money. From ECN broker services that allow for near-instant transactions to crypto coins that allow for seamless cross-border deals, today’s financial market is a lot different from what it was a few years ago. The trend continues as more financial technologies develop. Here is a close look at some developing technologies that will change the financial landscape even more in 2021.
Increased Digital Banking
Many banks now offer digital accounts, and that is only going to be even more prevalent. According to the data, 14.2 million US citizens have online banking accounts. The UK has it even better, with 23 percent of the population having a digital banking account. If your company is not using this to its full advantage, then you’re missing out. Digital banking allows customers to send payments a lot more easily and securely. Besides that, they are a lot more confident in their spending since they can easily check their bank balance. Allow for more than credit card payments on your eCommerce site, and you open up to more customers.
P2P Payment Methods
Another development in the financial sector that is getting popular is peer-to-peer lending. Normal lending institutions use the money entrusted to them for loans. When the loans are paid with interest, the funds are reimbursed with some added sums. This is what banks do to fund their loans. The difference is that peer-to-peer lending cuts out the need for banks completely and has people lending money directly to borrowers through technology. Investors deposit money to a website, and borrowers look for loans they can take out. If the lender approves a loan request, it is all done automatically by the platform. Thanks to its all-digital methods, people have been turning to it as both an investor and a borrower. The technology is maturing, too, with more secure services that ensure both parties are happy.
Continued Rise Of Cryptocurrencies
Cryptocurrencies have been around for some time now and have been building solid momentum. In 2020, bitcoin hit record highs as many buyers turned to it as a shelter for their assets. With its higher profile, many people see the benefits of cryptocurrencies, which can mean an even bigger boom this year. Besides bitcoin, Ethereum and Litecoin also see their moment in the sun. Some governments have decided to start their cryptocurrency to get into blockchain development. You can expect news from India and China soon on that front. Governments are also thinking of regulation, so there is a lot of potential changes ahead for cryptocurrencies.
Imagine doing banking but not with a bank but a retailer. This is what is possible through the idea of white-label banking. Banks can potentially open up their banking services to those with no bank licenses. Technically, the bank does all the work, but the name on the service is of the retailer. The idea is that banks offer their APIs as the basis for third parties to offer their financial service. It opens up a lot of possibilities. Imagine an online store where you can deposit money like a bank account. With close integration, this money is then used for easier payments. Many customers would love the convenience. It is also a good thing for banks since it is them technically doing the job.
Financial regulations require a variety of things. This includes know-your-customer procedures and anti-money laundering protocols. All of these processes cost money to implement. But there are companies out there who are using the outsourcing philosophy on it. They have started offering regulation technology services to financial institutions. This can make it cheaper for banks to do their jobs while ensuring the same high level of quality,
Online Financial Education
A lot of people are very bad at their finances. While learning how to better handle their money, people can now turn to better resources nowadays. This is mainly online financial education resources and tools. They can learn to budget, do their taxes, and more. There are also a wide array of tools that can make it all a lot easier. Increased financial literacy will have more people saving and investing in the long run.
Knowing what to expect will ensure that developments will never blindside you. These tech developments are just the beginning. More advanced tech is being developed every day. Staying on top of these changes will ensure that you can adapt to whatever is happening in the financial world and come out as a winner.