The fintech industry has seen remarkable growth in the last decade, and it is projected to reach a valuation of $492.81 billion by 2028. While high demand suggests potential for high profit, competition is fierce, and fintech companies must take proactive measures to outperform their rivals. By focusing on the development of future-proof solutions that can accommodate the challenges of tomorrow, fintechs can stay ahead of the curve.
There are several key areas to consider when developing new fintech solutions. Firstly, artificial intelligence (AI) has the power to revolutionize the industry by automating processes, detecting fraud, improving customer experience, and supporting big data. Therefore, it is imperative for companies to invest in AI to develop predictive models and voice assistants that can enhance both customer engagement and business performance.
In recent years, decentralized finance (DeFi) has also gained traction, leveraging blockchain technology to eliminate intermediaries, democratize access to services, and offer transparency to users. Banking industries are adopting Central Bank Digital Currencies in response to the growth of DeFi, and embedded finance integration is rising. This transformation would require fintechs to be prepared with self-driving financial products.
The infrastructure that underpins financial systems, like data networks, clearinghouses, and payment systems, is essential for the smooth functioning of fintech solutions. However, these structures often lack interoperability and are outdated. Fintech solutions can be improved by the adoption of open banking standards, as it increases inclusiveness and competition. The open banking industry has experienced a growth rate of 24.4% and is projected to reach $43.15 billion by 2026.
Furthermore, the potential for fintech growth lies largely in developing economies where traditional infrastructures are limited, providing opportunities for companies to build digital solutions from scratch. The need for mobile payments is also becoming increasingly important, with the number of mobile payment users expected to reach 1.3 billion by 2023. Therefore, mobile payments need to be integrated into fintech solutions to make payments swift and convenient, driving adoption and usage of such solutions.
Additionally, the nature of fintech companies is supra-national, meaning they can provide services globally. Thus, it is crucial for fintechs to prioritize cross-border coordination and sharing of information and best practices to foster global standards, collaboration, and knowledge exchange, which are essential for the growth and stability of the industry.
In conclusion, the longevity and growth of a fintech company require future-proofing its solutions that anticipate and support upcoming challenges, allowing companies to adapt and be responsive to the evolving needs of the financial sector. By adopting a proactive and strategic approach that considers the development and integration of innovative solutions, fintechs can lead the industry into a sustainable future.
