It can be challenging to keep up with relevant trends in an industry that moves at lightning speed. Here’s a breakdown of some of the newest things happening in financial technologies.
1. Buy Now, Pay Later
Yes, this is a different way of saying ‘go into debt.’ But big-brand companies like Walmart and Amazon utilize it, and platforms like Klarna and Affirm have sprung up. Expect to see this at retail stores big and small. Also, if you can’t afford something at a total price, it’s best not to buy it.
2. Digital Banks
Innovative entrepreneurs make money by serving consumers that incumbents ignore. In this case, digital banking is helping people that banks like Chase, TDBank, and JPMorgan don’t want. In Latin America, apps like Uala are banking the unbanked, giving people more financial freedom than ever before. In the U.S., Varo and Ally are doing the same thing. Best of all, there are no fees, keeping more of your money in your pocket.
3. Blockchain Technology
I know, I know, we’re tired of hearing about how great blockchain and cryptocurrency are. But in all seriousness, it’s changed the way people do business. People can send money worldwide with little to no oversight. Many people think it’s for devious purposes, but it’s given countries with low GDPs like Malta and Bermuda a chance to grow their economies and build a robust middle class.
4. Artificial Intelligence
Despite Hollywood’s semiannual doomsday blockbuster about robots going wild, artificial intelligence (AI) is not scary. It can help companies in every aspect of their business, including customer support, data analysis, fraud detection, decision making, and more. In addition, with Big Data becoming increasingly important, AI can help companies comb through unstructured data quickly and efficiently.
5. “It’s my Money, and I Need it NOW!”
According to BOSS Magazine, “Gusto, an HR and payroll platform for small businesses, recently added a Flexible Pay feature that allows employees to get paid when they want.” In other words, employees have much more flexibility and control over their paychecks. While it may not solve stagnant wages or unpaid overtime, employees won’t have to worry about when their check arrives. BOSS also stated, “under the traditional payday schedule, those who were forced to deal with unexpected financial hardship were forced to overdraw bank accounts and pay significant overdraft fees or get payday loans that were expensive to pay off.” Flexible pay will dramatically reduce the number of people paying these predatory fees and loans.
6. Financial Literacy
In any part of life, being knowledgeable about a subject is vital before making a decision. In finance, it’s critical. Your relationship with money is a lifelong one. The COVID-19 pandemic has changed the way people view budgeting, interest rates, investments, and much more. We’ve seen an exponential increase in people interested in learning more about money, and it’s empowering individuals to serve themselves and their families better. You can read why financial literacy is so critical here.
7. Contactless Payment
Contactless payment might not seem as significant to you as AI or crypto, but it’s an essential part of our daily lives. Cash is losing popularity, and contactless pay is taking its place. You connect a credit card to your phone, and voila! You bought a cup of coffee with one tap. I plan on keeping my credit card off my phone, but I must admit that everywhere I shop has an option for Apple Pay or Google Pay. If you plan to use it, make sure you have ample security on your device to avoid identity theft.
8. Cybersecurity
Ensuring businesses and customers can shop online worry-free is the key to e-commerce platforms’ profitability. The larger someone’s digital footprint, the more likely they are to be targeted by hackers. According to CYBRI, a U.S.-based cybersecurity company, “common forms of cyber threat, in this case, would include spear-phishing, or targeted attacks on individuals by hackers claiming to be their bank or financial institution, tricking them into downloading malicious software, sharing sensitive information or entering passwords into an insecure, fraudulent website.” There’s no such thing as being too safe, especially when it comes to money.
9. Healthcare
The U.S. healthcare system is a $3 trillion industry that is ripe for disruption. Our public health sector has been scrutinized for decades for myriad reasons, but it’s time for patients to become the priority again. Services like healthcare savings accounts, patient-focused payment platforms, and diagnosing patients with AI will transform the industry into an unrivaled public service instead of the logistical nightmare we know it as.
10.Globalization
Now more than ever, we are part of a global economy. Technology has given companies access to markets they didn’t have 15-20 years ago. That means more acquisitions, more expansion into international markets, and more trends to stay ahead of. For FinTech professionals, it’s never been easier or harder to be successful. Begin locally, think globally.
If you liked this (newsletter/blog post) and want to hear more, check out my podcast, The Whiskey Hue. We explore the business, culture, and markets over Whisk(e)y to give listeners a quick POV on today's hot topics and how they relate to business in Black and Brown communities. You can learn more about my professional experience on my website. Sava360 Ventures colleague Harry Ortof | LinkedIn contributed to this article.