Big Financial Technological Trends for 2020

1.Fintech will rule the business models

Large financial institutions always had the advantage of their size and the network. These institutions also had a strong system to manage regulations and compliance. Due to these reasons, small firms found it difficult to enter the financial industry. 

Well now times are changing and Fintech disruptors are finding their way in. These disruptors are fast-moving companies, startups focused on a particular technology that can be used across streams like insurance, asset management and also mobile payments. Investments in Fintech have increased thrice from 2014 and has reached more than $12 billion. These disruptors offer a better customer experience but at a lower price.

2. Sharing Economy will be embedded in Financial Systems

Customers will need banking services in 2020 but may not go to the bank or at least what we think of banks today. The sharing economy has started with cars, taxis, as well as hotel rooms and now, is spreading to banks. Sharing in banks case means distributed asset ownership and using technology to find matches between providers and users of capital and making the bank an intermediary that the owner.

Financial institutions today put their capital at risk and initiate and manage the end of the transaction to end. Going forward this will change and these financial institutions will be either mediator decreasing their stake or just be another node in the network.

3. Blockchain 

Companies in the 1990′ s started realizing the importance of the internet and the potential of eCommerce. Even after the dot com crash the industry and soared and revolutionized the way we live today. Similar is the case with blockchain, there are curiosities on how this operates and how are they funded. Companies are now exploring the use cases of their applications. 

Blockchain matters because it could make the financial services infrastructure less expensive and the list of its use cases has no end. Blockchain can be applied to financial transactions to agreements and more.

A few real examples of companies using blockchain are Spotify, Shopin, B2Expand, Bitcar, De Beers, Accenture, Gem, Deedcoin, Utopi.

4. Going Digital

Digital payment can be applied to insurance, payments, retail banking, wealth management and are moving towards areas of capital markets and commercial banking.

Let us take an example of Digital Wallets. Digital wallets today are used in every household and are used mainly on mobile phones. These digital in these wallets is now fading away and are now only considered as wallets. These wallets are now at a battle between the traditional payment methods and disruptors.

These wallets provide consumers with a fast, secure, low-cost method to send the receive money over the internet. Mobile devices are obviously easier and offer greater convenience and security than the use of plastic cards which still include magnetic chips. A wallet also creates real-time connections and other data like bank balances and alerts can also be shared with the customers.

Below image highlights the most popular digital wallets in India by types –

5. Advancements in Robotics

Initially, when ATM’s were introduced people refused to use them gradually after more awareness and training they started using it because it provided convenience and better service. ATM’s are nothing but robots, they are convenient, simple and easy to use.

Over the years there has been a lot of change and advancement in this field. Artificial intelligence (AI) is already playing an important role in capital markets. Algorithms are used in high-speed training, valuations, anticipating the emerging trends. These advancements were initially only limited to institutions but now they are even accessible to private players. AI has also become prominent in the investment industry. AI system also helps in investment strategy, active management. AI will also help in underwriting especially in markets where data is readily available. Banks are also increasingly using Artificial Intelligence to detect frauds, rogue trading, and market abuse.

6. Public Cloud

SaaS (Software as a service) is a cloud-based software that a lot of financial institutions are using. SaaS was initially used for processes that were noncore like HR, financial accounting but now it is increasingly being used for strategic solutions and KYC verification. It is expected that in 2020 core areas like payments, credit scoring and billing for managers, basic accounting functions will also be under SaaS.

Cloud is scaling because the data storage costs have reached a peak this is leading to an increase in the cloud-based storage and investments in traditional infrastructure have reduced. 

The sharing economy also plays a key role here, companies are also selling it to those who need it. Conventional banks are selling the payment infrastructure to small Fintech companies, healthcare institutions, and industries.

With its benefits, some factors need to be taken care of like the regulatory requirements, data security, confidentiality and the cost of maintaining it. There are a few countries that have barred transferring data of clients to public cloud solutions.


To benefit from these changes there are a few factors that the companies should take care of like updating the IT operating model to get ready for the new changes, pay more attention to cybersecurity and related crimes, access to the right kind of talent and skill set necessary to execute the changes when needed.

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