Fintech represents a fast-growing area of the economy especially when you look at it from the digital frame. While the technologies that converge financial systems from the past, present and the future have continued to cause ripples in the economy, it would appear that millennials aren’t the only ones excited about Fintech.

Thanks to the advancement in technology and the fast rate at which people from all over the world are accepting the dawn and the subsequent maturity of the digital age, it would seem that Fintech systems and advanced business models are embraced thanks to its ability to revolutionalize the access, the cost, as well as the quality of financial services.

Fintech is gaining ground in bill payments, banking, as well as investors. The systems bear the characteristics of constant innovation as well as the disruption of older financial models, and the results are spectacular, the innovation being better than the old ones.

According to KPMG and H2 Ventures, Fintech innovation will affect the financial services sector in different ways the main ones being the development of a funding boom.  But, this is not the only form of disruption to expect from Fintech. As advancements engulf the Fintech sector, enthusiasts foresee disruptive trends in three areas: namely, data management, payment and banking, and insurance.

Data Management

The disruptions in data management arise from Fintech’s need for reliable data management solutions that facilitate the integration, analysis, plus the management of different kinds of data leading to the production of accurate and consistent information.

For reliable data management processes, there is a need for seamless integration and use of systems hence the increase in the use of AI technologies. It’s also worth mentioning that data management is essential in other sectors such as marketing and engineering, and not just financial systems. The automation of the data management platforms is one of the steps geared towards ensuring that the innovators in Fintech focus on automation of their systems. The use of data management is common in the crowdfunding platforms which have been on the rise.

The data management systems are also on the increase on the buy side of businesses with firms having an increasing need for the integration of advanced risk management as well as business performance solutions. While doing this, the companies optimize their internal data functions, particularly the ones which have slowed down the companies’ ability for creating value.

From studies undertaken to determine the growth and the use of data management systems, the trends outlined, data management trends that will affect financial systems, it became apparent that the following should be expected.

  • Reorientation to be expected

It’s clear that organizations in the financial sector are looking into reorientation or the reorganization of data management strategies in a uniform way.

  • Absence of standards

There is no standard framework for data management systems and the ones that exist vary with business departments as well as business units.

  • Outsourcing of systems

With managed services turning into a priority, an increasing number of organizations is outsourcing data management services for cost reduction and streamlined business operations.

  • Increase in cloud-based solutions

With more companies outsourcing data management services, there is an increase in the use of cloud-based solutions. This offers more flexibility to businesses.

  • The adoption of technological innovations

Alongside the use of cloud-based solutions, you can expect the adoption of more advanced technologies for data management. It’s anticipated that the use of NoSQL will be the industry’s standard by 2019.


Payment and banking

These two areas of finance are experiencing profound advancements. Several innovations are changing traditional banking and payment solutions it would appear that this is the areas of business that is showing the highest level of growth thanks to technology.

In the payment industry, these trends are expected to take over.

  • Blockchain-based payments

According to a report by Deloitte’s Center for Financial Services, the banking payment systems are expected to increase significantly by 2020. The projections are expected to result from the use of blockchain technology, machine learning, collaborative ecosystems, artificial intelligence, demographics as disruptive forces, and the use of digital currencies.

Blockchain technology is an orchestration of the internet, private key cryptography, and a protocol that governs incentivization. The blockchain is the backbone of what could be a new type of internet since it allows for the distribution rather than copying of digital information. You could, therefore, think of blockchain technology as a form of the digital ledger with economic transactions. The ledger isn’t corruptible, and it can be programmed to be used in recording anything of value, not just financial transactions.

The report by Deloitte references the unique feature of the disruptors of the payment industry as the $26 trillion transaction value, as well as the convenience-centered customers and the endless inefficiencies.

The reliance on third parties for access to talent and non-core infrastructure is an expected commonality. And banks are expected to incorporate complex connected networks of vendors and other third parties.

However, it should be noted that even with the expected changes, banks will retain their dominance in most corporate transactions thanks to their complexities and the high barrier of entry. Also, banks are still seen as the drivers of the innovations in payments thanks to the central systems of credit.

And, cryptocurrencies like Bitcoin and Ethereum becoming popular, and the use of blockchain technologies preferred by some people because of the use of a digital ledger than records transaction chronologically and for all to see it doesn’t come as a surprise to see a push for bank-backed blockchains. Large and small businesses are beginning to accept payments in cryptocurrency and it wouldn’t be too long till your clients pay for services using Bitcoin or Ethereum.

  • Artificial Intelligence and Machine Learning

These two intertwining technologies aim to facilitate the management of data in financial systems. That is the storage of data as well as the use of the data to give detailed analytics.

The use of internet and mobile services which incorporate AI and ML is seen as a move to improve efficiency and to cut down costs.

Some of the AI and ML technologies making these processes possible include:

Authorization Rates

For the optimization of payment routes and increasing the field of success rates, machine learning and artificial intelligence are employed in the optimization of payments. These technologies can deal with issues around the processing of cards, among them, authorization rates.

Despite compliance releases sent from vendors like Mastercard and Visa, the authorization process is often lengthy. And, even with the lengthy processing, your card could be declined even when it shouldn’t.

So, how do these technologies come in? Well, Machine learning and Artificial Intelligence can learn from different payments submitted, and they can estimate required changes based on the card type, transaction type, merchant country, and the issuer, among other variables. With these details, ML and AI ensure the optimization of the payment route, a high rate of success end result, and increased authorization rate.

Fraud Engine 2.0

Machine learning and artificial intelligence have been put to use in fraud prevention in the form of the Fraud Engine 2.0.

This machine uses an algorithm that derives insights in relation to the variables that could lead to a fraudulent payment. The technology used can use the Rule-Basic Logic which blocks transactions likely to be fraudulent. The only set back is that fraudsters will immediately note that their transactions have been blocked and they switch to other merchants who may not use the application.

  • The Internet of Things

A new, robust and highly adaptable technology in Fintech is the one that incorporates the use of voice, for example, voice-enabled payments. Thanks to this technology, you speak to a device or an application like Amazon’s Echo, Apple Homepod, or Google Home and you give it instructions for some payments. Under the internet of things, you have applications such as:


By pulling together different platforms into an ecosystem, Amazon has different features under one roof such as Alexa, Amazon Pay,, and Amazon Apps.

These features are integrated, and you can use one or more features to purchase different products. For example, Amazon Echo lets you purchase things from Amazon as long as the site has your card in their files. Using Alexa, you can order and pay for your products using Amazon Echo.


This is one of the newest trends expected in 2018. It will feature Apple’s release of Apple Homepod that is expected to feature Siri Intelligence. As a starting point, the app is expected to provide a gratifying music experience as the teams working at it implements its use in facilitating voice-enabled payments through the use of Apple Pay. The app will be accessible on Apple devices like iPad, iPod, and the iPhone.

Google’s Functionality

By focusing on functionality, Google’s voice-enabled devices like Google Home simplifies purchase and payment of products from Google Express, a shopping service that gives you access to same-day deliveries from stores such as Walmart, Target, or Whole Foods.

But how does it facilitate payments? You can link your debit or credit card to Google Home, and then you order whatever you want by speaking to Google and placing your simplified order.

Unfortunately, this service is only available in the US, unlike that is available in the US, UK, Italy, Germany, Ireland, Japan, Netherlands, China, Spain, Mexico, India, Brazil, and Australia.

  • Mobile wallets and Mobile Commerce

Other than machine learning and artificial intelligence, Fintech trends see show that online and offline commerce will benefit from the mobile wallets. The use of the mobile wallets is expected to increase with disposable incomes increasing for consumers from a different part of the world. These wallets are seen to cause an influx of spending while the adoption of safe mobile payment systems is increasing the efficiency of digital processing of financial transactions. SamsungPay, AndroidPay, and ApplePay are examples of the mobile wallets.

Old is gold

PayPal, a giant E-Wallet is one of the other big players in mobile wallets and mobile commerce. Over the years, this platform has changed its structure to meet the needs of different users across the globe. Rising above other payment platforms, PayPal takes the lead in facilitating P2P payments. Its growth also comes from its integration with applications like Facebook Messenger, Nintendo Switch, and Siri. These integrations make for the platforms ever-rising volumes. And, the trust that PayPal has built among its users thanks to the use of sophisticated security systems is the reason for its rise and positioning as the leader in the E-Wallets scene. It’s also easily accessible on your mobile devices.

New E-Wallets

Trying to edge out its competitors such as PayPal, you have WeChat and AliPay, sites native to Asia but now expanding to the US and Europe. These sites offer simplified payment channels, and users can use the wallets for online and offline shopping. If all goes well, these wallets could phase out or significantly reduce the use of Visa and Mastercard.

  • Introduction of Banking-as-a-service

Even though banks try to stay ahead in automation, it would appear that they are not moving as fast as it would be expected in this digital age. But, with increased demands for Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS), there is a high likelihood that the disruptions will give rise to Banking-as-a-Service (BaaS) and Banking-as-a-Platform (BaaP). These changes are expected since there is a drift from income and the access to formal financial services to the integration of mobile and internet innovations.

While the CRA audit committee may have to share their input on this for small business since it could affect CRA interest relief, BaaS is a move that only needs time before it is a reality.

  • Increase in regulation

The Fintech industry is growing and evolving rapidly, and regulators are keen to keep up. Even though governments are trying to come up with regulations, it would appear that the stakeholders are doing all they can to regulate the Fintech industry and to keep online users safe. Regulation is an important step in gaining consumer trust.

Along with regulation, there is an increased emphasis on the security of fintech systems

  • Insurance

Fintech is playing a big part in changing how insurance services are offered by affecting the data, technological and the design systems. Systems that simplify access to health insurance are on the rise as are applications that allow fast access by doctors. Also, consumers can get their prescriptions without having to leave their homes.

Looking at these trends, payment, banking, and insurance services are accessible from any place as long as you have the technologies. With companies and governments looking for ways of regulating fintech systems while enhancing security, it’s clear that these trends are going to boost economies.

By Chakraborty

Dr Chakrabarty is the Chief Innovation Officer of IntuiComp TeraScience. Earlier she was Assistant Professor of Delhi University, a QS ranked university in India. Before that she has held research positions in IIT Mumbai, IIT Chennai and IISc Bangalore. She holds 2 patents and over 20 research publications in her name which are highly cited. Her area of research is in smart technologies, integrated devices and communications. She also has a penchant for blogging and is an editor of Business Fundas.