Emerging technology in FinTech

 

Here are the eight emerging technologies that according to the World Economic Forum (WEF), will continue to contribute to the evolution of innovation in financial services.

1. AI

Over the past few years, AI has evolved from a means of creating new touchpoints in business to a platform for aggregating the data necessary for business decision-making. According to the WEF report, over the next few years, financial institutions and consumers will begin to introduce AI-based tools, and AI will replace many of the call center customer service operations and data entry/verification tasks.

2. AR/VR

In the FinTech sector, the evolution of augmented and virtual reality is expected to create new purchasing experiences. For example, in the current e-commerce, it is common to purchase products online based on two-dimensional information such as images and videos, but in the future, it will be possible to visit a virtual shopping mall.

Please read on software test automation services

3. Cloud Computing

Cloud technology is one of the core technologies that supported the dawn of FinTech, and it is expected to continue to evolve as an important technology in the future. Cloud investment in the financial industry continues to accelerate, and according to a WEF report, it accounted for almost half of all IT investments in the financial industry in 2020. In particular, when a startup develops a new FinTech-related service, cloud-first has become the top choice.

4. Distributed Ledger Technology (DLT)

Distributed Ledger Technology is “the consensus of replicated, shared, and synchronized digital data that is geographically spread (distributed) across many sites, countries, or institutions”, and common technologies are blockchain and smart contracts.

Blockchain, which is known as an essential technology for virtual currencies such as Bitcoin, can be said to be a type of fragmented ledger technology. Blockchain is said to be a decentralized system in that it enables the transfer and liquidation of assets without going through a centralized administrator by sharing ledger information with everyone on the network. On a side note, a smart contract is a mechanism that automatically executes transactions based on rules determined on the blockchain.

In addition to the current cryptocurrency boom, recently, a technology has been born that handles digital data with unforgeable appraisals and ownership certificates called NFTs (Non-Fungible Tokens) around blockchain technology. NFT is attracting a great deal of attention, not only in the FinTech industry but also as a technology that creates a new market where people can buy and sell with peace of mind by adding asset value to digital data such as digital art that can be easily copied.

5. IoT

The Internet of Things enables the transmission of a huge amount of data at significant velocity via the internet. Currently, it is said that there are already more than 30 billion devices connected to the Internet around the world. WEF points out that in a few years, people will use about 15 to 20 connected devices at the individual level. This has the potential to create a variety of new businesses.

6. Quantum computing

Quantum Computing is a next-gen computing technology that is attracting attention all over the world, but it is a technology that has not yet been put into practical use.

Simply put, quantum computers are said to be able to achieve much more powerful computational power than current computers by adopting a different mechanism and utilizing the physical state peculiar to quantum mechanics. If the powerful processing power of quantum computers were to be applied to the FinTech field in the future, it would not only advance asset management and credit evaluation but also create insurance products optimized for each individual through more precise life plans and simulations.