Top 10 Fintech Innovations

The global FinTech market will reach $492.81 billion by 2028, with a CAGR of nearly 17%. This is compared to the $194.1 billion market value in 2022.

With innovations and fintech products on the rise, many companies and seasoned professionals will remain innovative in this market segment in 2023. So, businesses in this domain should keep an eye on fintech innovations.

As you know, DashDevs is always looking forward to keeping you at the cutting edge of business and payment options. This article focuses on what our experts believe to be the trendiest and most innovative ideas for the fintech ecosystem.

The growth of the financial innovation vs. fintech business depends on the technology that underpins financial goods and services. These are the ten most important digital innovations in the domain that will change the game for fintech companies this year.

So, let’s get started and dive into the world of the hottest fintech innovations examples!

1. BLOCKCHAIN & IOT

An overview begins with the Internet of Things (IoT) and blockchain autonomous database systems that have transformed the world of fintech products and services.

IoT wealth management platforms might significantly expand the possibilities of fintech solutions for banks and financial apps. For example, a linked security camera positioned within a bank may identify any irregularities in client behavior or potential safety vulnerabilities and instantly report the information to regulators.

Another useful innovation, blockchain, is regarded as the most secure technology for database management in all areas. It works on guidelines that record every particular change, data transfer, and effort in data tweaking as separate data entries, creating maximized transparency for all parties while also making it entirely impossible to remove and tamper with any data.

Fintech solutions examples:

1. Speaking of the future of banking applications, the increased connectivity between mobile apps and other gadgets will play a significant role in driving transactions. For example, instead of waiting in line for basic guidance, consumers may complete tasks directly through the mobile banking app, including meeting Know Your Customer (KYC) regulations. This is extremely beneficial for fintech lending companies, enabling them to accommodate their customers faster. By the way, crypto lending is already being used by innovative fintech companies as an alternative way to credit and can be represented by peer-to-peer (P2P) and peer-to-business, a.k.a. P2B lending. It’s a market segment with a global CAGR of 25.9%.
2. Since blockchain enables strong security for fintech apps, the world’s biggest financial institutions and banks, like Visa or DBS, are now utilizing fintech innovation in wealth management. Aside from unprecedented security benefits, blockchain also provides maximum transparency, quicker data transfer, and lower transaction costs.

2. SECURE PAYMENT SOLUTIONS

Among leading cybersecurity technologies, robust biometric identification is one of the most highly effective for deterring hackers and other cyber-criminals. It can help business owners secure the payment processing since integrating smartcard chip technology with multi-factor biometric verification is extremely efficient for any innovative fintech product.

To explain it in a few words, the process goes like this; a cardholder can install two identifiers on the phone terminal and use them to safeguard their payment throughout a digital transaction. The biometric multi-factor carousel works on any iOS/Android/Windows phone, laptop, and desktop with Facial Recognition, Voice Control, Lock Pattern Behavioral, Fingerprint Behavioral, and Button Stroke Dynamics Behavioral.

When buying on the internet, the user can utilize their authorized smart card to pay just by speaking or by placing a picture or fingerprint through the phone’s in-built sensor.

Such a payment session enables enhanced security in future fintech solutions and prevents hackers from carrying out transactions using stolen credentials. The high level of security (biometrics) ensures confidence and transparency in all transactions, including all payment methods.

Moreover, within the bank or card issuer, the backend tracking server supports thousands of transactions per second, allowing the CSO to productively supervise a system’s quality in aspects of EER, FAR, and biometrics thresholds to obtain good results.

Overall, secure payment solutions like biometric identification are a beneficial step for digital banking companies and digital wallets.

Fintech solutions examples:

Voice-enabled fintech payment innovations are an alternative for fintech businesses wanting to create POC initiatives on a small budget. The technology may be utilized for payments at retail shops that do not have contactless payment devices. It also allows visually impaired people to join in the cashless economy, making the market more inclusive. The global voice-enabled fintech payment market is rapidly growing, reaching a CAGR of 9.3%. US market size of the said market reached $1.6b. Meanwhile, global numbers skyrocketed up to $5.9b.

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3. ARTIFICIAL INTELLIGENCE

The most innovative fintech companies are looking for ways to extend their use of intelligent technology, from typical institutions’ testing of robotic advisers to sophisticated algorithms examining credit profiles. It is a great opportunity for innovative lending solutions to automate fintech underwriting and use machine learning to feel the merit of deep analysis and enhanced decision-making.

The rise of artificial intelligence, machine learning, and robotic process automation offers numerous advantages to those working in the finance industry, including lower loan default risk, better risk management, process efficiency from data gathering and analysis, and improved customer experiences.

Among the major advancements of AI in the financial innovations domain are robo-advisors; they are currently one of the most prominent trends in fintech. These internet systems may handle assets autonomously and provide a personalized portfolio based on customers’ individual preferences. To establish the best investment plan, they employ cognitive computing technologies as well as big data trends.

Fintech solutions examples:

The most innovative finance companies are utilizing chatbots to handle basic client service questions or using tools like IBM Watson for financial analysis. These AI-driven solutions may learn from customer interactions and tailor future activities to this experience.

Machine learning-driven bots combine past data (such as previous purchases) and real-time inputs (such as media coverage) to analyze and anticipate future client behavior, which might enhance the financial products efficiency.

4. CLOUD COMPUTING

There are three types of cloud systems that can bring benefits to various fintech product ideas:

1. Public. These cloud systems enable providers to share on-demand cloud services with organizations and individuals, leaving the services accessible to the wide public. These service examples include Azure, AWS.
2. Private. Cloud systems such as these have enhanced security systems to store all the sensitive information of a certain company. They leave company’s information “behind the curtain”, allowing companies to use local or, in some cases, collocated data centers.
3. Hybrid. A perfect mixture of both public and private systems, that allows companies to benefit from either of these types since systems can operate independently.

Other cloud systems include community, distributing, poly, big data, high-performance computing, and multi-cloud.

Cloud computing, which is among recent fintech innovations in lending and banking, absolves banking firms from non-core operations like IT infrastructure and data centers, while also allowing them to use flexible storage and computing services cost-effectively. Simultaneously, the cloud is giving rise to new formats such as open banking and banking-as-a-service, modernizing the traditional banks. This upends the eternal relationship between clients and providers of financial services.

Fintech solutions examples:

Billte is a Swiss firm that provides invoice management software to help businesses automate billing procedures. Unstructured invoices are QR-coded and converted into e-bills. The technology then distributes bills via different communication channels, including email and SMS, using automatic notifications and real-time data. Furthermore, it records payments in many currencies, increasing performance and liquidity for small and medium-sized businesses.

5. OPEN SOURCE & SAAS

Speed and flexibility are crucial for new enterprises and fintech technological innovators, especially considering the digital economy’s high competitiveness and winner-take-all tendencies. For tech players and traditional financial institutions, open-source software, cloud-based technology, and software-as-a-service (SaaS) have become indispensable.

So, talking about SaaS it’s important to note that due to its serverless architecture, businesses can use the software without owning or maintaining it. The absence of a need to operate on their own services and complications related to this makes customer relations management more productive. Serverless technology in fintech is much more cost effective compared to traditional development since costs are tied to running software code rather than to it being created continuously. The complete compliance with business needs increases the productivity of said services, making SaaS a perfect option for the constantly evolving fintech market. It also promotes flexible scaling, minimizing the losses in fintech software development efficiency.

Fintech solutions examples:

1. Open-source software is a blessing for businesses trying to grow quickly since it offers a free code base that enables developers to get a strong foothold in developing their own apps. For instance, in 2019, McKinsey’s analytics business launched Kedro, an open-source platform enabling data scientists and engineers to design data pipelines.
2. SaaS enhances security protocols crucial for fintech solutions using SSL encryption. Apart from this, the high customization opportunities it provides allow fintech companies to flexibly change according to the market demands, which not only accelerates their time to market but allows the best fintech products to leverage the competition.

6. HYPER AUTOMATION

Robotic process automation (RPA) allows businesses to easily implement software robots like chatbots at scale and is becoming a key element of the digital revolution. The primary role of RPA is to delegate the management of workflow data and company interactions to bots, simplifying and optimizing business operations.

The primary criteria for validating RPA tech viability are high consistency, clear rationale, and robust stability. RPA will become more completely integrated with AI in the future, increasing its efficiency in dealing with increasingly complicated business contexts, expediting offerings, and compliance with fintech regulations.

Simply described, hyper-automation is the integration of automation, robotics, and AI technology that aims to enhance the productivity of industrial operations.

Hyper automation necessitates the employment of several tools, techniques, and frameworks, including:

• AI: Artificial intelligence
• Machine Learning
• RPA: Robotic process automation
• BPM & iBPMS: Business process management & intelligent business process management suites
• iPaaS: Integration platform as a service
• Low-code platforms
• Event-driven architecture
• In addition, various tools and technologies

Fintech solutions examples:

Digital human support service. These are 3D chatbot models in the virtual world made using AI technology that can communicate with and reply to users’ activities. The banking sectors in Meta use them to perform 24/7 client service and other financial duties. Client help may be provided instantly thanks to hyper-automation technologies that link to the bank’s backend systems.

7. LOW CODE

Low code platforms (LCPs) enable developers and users to create programs using graphical UI and settings rather than standard computer coding. While still young, the platforms have the potential to make software accessible for everyone, even people without advanced software development skills.

Businesses frequently use NCDPs to speed up the building of cloud-based apps while maintaining the company’s strategic alignment. Low-code systems comply with business strategies through audit trail automation and document production. This allows companies and startups to swiftly adapt to market movements as it gives more space for flexibility.

Fintech solutions examples:

Google Cloud has invested in and bought Unqork, a no-code software platform, one of the biggest players in the low-code and no-code marketplace domain. The service enables users to create apps without advanced coding knowledge.

According to Alex Schmelkin, Chief Marketing Officer of Unqork, tasks that formerly took a decade for financial businesses to perform may now be completed in a matter of months after adopting “no-code.” Unqork now employs over 100 programmers, with a primary focus on financial services.

8. CYBER SECURITY ENHANCEMENTS

As cyber criminals uncover new security holes in networks, professionals must develop even more inventive solutions to protect critical data. Even with the finest data security safeguards in place, hackers are always finding new methods to acquire sensitive data. Overall, this is a problem for any business related to fintech, and anyone from top fintech lenders to real estate can feel the merit of enhanced security measures.

Notable cybersecurity improvements in the financial sector include multi-cloud data storage, SASE, and decentralization.

As cyber dangers increase, so do threat protection measures, particularly with the advent of online transactions and digital operations. So, fraud management, KYC, AMT, and passwordless authentication solutions can help solve security issues with the right technology.

Fintech solutions examples:

RapidID, an Australian firm, provides an electronic identity verification solution to confirm the digital identity of customers. It assists banks in safeguarding transactions as well as mitigating money laundering and terrorist financing. Furthermore, mobile phone systems process biometrics and identity papers to authenticate identities, which speeds up the process. The business also employs face recognition technology to verify that only authorized staff carry out transactions. As a result, the solution provided by RapidID lowers the risk of human errors and eliminates the possibility of security breaches.

9. GAMIFICATION

A gamification is a strategic approach that uses game elements like personal score, badges, coupons, or awards to engage users in interactions with an app.

Studies show that game-like elements in the software can increase customers’ engagement by up to 40%. And, with advanced techs like AI, ML, and blockchain, it can get even more inventive, intuitive, and customizable. So, this is no miracle that the global gamification market, with a CAGR of 26% is attracting new investors.

In fintech, gamification lets clients track their spending patterns through events or progress bars. As opposed to the central banks, private banking can implement gamification and offer unique content like credit card designs, reward badges, and cash-back; this rewards the desired behavior in customers, and helps them establish better saving and spending habits.

The top fintech lending companies incorporate gamification into their business model, adding interactive elements and engaging their users in more processes than ever.

Fintech solutions examples:

1. Fortune city. This simulator game has similar functionality to a real budgeting app. In the game, users build a city by tracking their expenses and income. It has automated synchronization and navigates users through the game’s features, making the experience unique and intuitive. Aside from this, the idea is innovative and can be ground-shifting for the digital economy, pushing back the boundaries of social status or even minimum age required for efficient budgeting. The application currently has over 5m downloads.
2. Monobank. A Ukrainian full-digital bank that provides users with a unique gamification experience. Monobank has reward badges that users can acquire after spending a certain amount of finances under one of the bank’s categories. They also offer flexible options for cash-back, which engages users into using their virtual card more. Overall, the interactive experience helped this application attract around 100,000 new users monthly and get 1.3m users to be active in the app daily.

10. REGTECH

Among the other top fintech innovations is RegtTech — the software aimed to monitor compliance requirements. Regulatory, digital solutions use technologies that can manage massive datasets or unstructured data to enable information monitoring and reporting. These technologies are also intended to assist financial businesses in complying with changing rules in the global market.

As political regimes shift and governments increasingly strive to support higher cybersecurity rules, the emergence of regtech may provide assistance to safeguard fintech security. These solutions are developed to manage large data transfers to comply with rules.

Fintech solutions examples:

Drata is a tool for monitoring firm security and automating data compliance for SOC 2 and other requirements. Users may identify security threats, manage suppliers and staff training, and maintain track of security policies. Drata has been utilized in a variety of areas, including banking, healthcare, software, and others.

LET’S WIND UP!

So, what are fintech solutions and how to evaluate their novices? Based on this article, it is safe to say that everything disruptive for the market can be seen as innovation and potentially benefit fintech. Payment gateways for eCommerce, lending services, virtual bankings, buy now pay later services; fresh ideas can shape every part of the fintech world.

Many fintech breakthroughs are foundational innovations that have significant potential to revolutionize financial services. Modern financial institutions must adopt innovative tech to ride the wave, and these 10 top innovations in the fintech industry may provide fresh insights. Leverage the competition by making informed business decisions for your organization’s future growth.