5 FinTech Trends to Expect this 2019

The 2008-2009’s worldwide financial crisis was the judgment year for the economic services provided by the finance industry that has significantly impacted the overall economy. One of which was the amalgamation of two different sectors that is now known as FinTech. FinTech is defined with digital innovations and technology-enabled business models in the financial services industry.

Fundamental Factors

Let us identify the 4 fundamental factors of the FinTech industry before we dive into this year’s trends in FinTech.

  1. Cost

For the last century, the financial intermediation cost remains unchanged preceding the global financial crises. FinTech innovations have helped reduced, if not eliminating, this cost.

  1. Regulation

Regulation aims to make financial services more extensive. This democratization has been helpful to FinTech startups.

  1. Legacy

A lot of mergers and acquisitions by large banks have not only made them file for bankruptcy but also mired in legacy systems. The case set the stage for FinTech to start anew that is easier and more efficient in capturing market share.

  1. Leverage

After the 2008-2009 dilemmas, financial leverage has become luxurious and burdensome. The FinTech sector relies on technological rather than financial leverage that pushed it to be reckoned with.


FinTech trends this 2019

The FinTech industry is evolving with the latest innovations. Let us take a look at 5 most significant trends to keep up with.

  1. Unified Payments Interface (UPI)

Unified Payments Interface is going to boom this 2019. This technology has enormous potential and pertinence for numerous participants in the ecosystem. UPI offers convenience to its consumers while increasing the digital footprint for the supply side of the financial services chain.

  1. Blockchain

Since the internet, blockchain is considered the biggest innovation that strikes financial services. Cryptocurrencies may be continuously booming but the technology backing it will thrive over the next few years.

  1. Artificial Intelligence (AI)

Innovators have been testing AI for decades and it is now being incorporated in many aspects of life, including financial services. Artificial intelligence will surely be an asset in FinTech. The “robo advisory” is one area that is gaining momentum like wealth management solutions that involve some form of machine learning.

  1. Equity Crowdfunding

Equity crowdfunding is emerging. It is also a common case of financial dis-intermediation that challenges traditional methods of raising equity capital for entrepreneurial ventures.

This part of the capital market will inevitably fall into the realm of FinTech in the forth years with its large number of funders and small ticket sizes.

  1. Mobile Payments

We have witnessed a flurry of activity in mobile payments for the past years. For this year and the years to come, we will certainly see more new entrants, and most significantly, new FinTech innovations in mobile payments.

In addition, UPI 2.0, which was initiated in August of 2018 and the deficit facility linked to it, will introduce thousands of consumers to a new form of credit. UPI 2.0 may also be one of the most preferred forms of making recurring payments such as EMIs.


Wrapping Up

The FinTech industry continues to explode. The fundamental factors of this growth we have identified are only a thin end of the wedge. The cost of financial intermediation is still comparatively high compared to other services rendered in the economy.

We can expect FinTech innovations in this space driving down costs for its end-users. Furthermore, the trends discussed here are sure to attract regulatory responses.

For example, cryptocurrencies received bad publicity in 2018 and we may see new versions of Blockchain technology emerging from regulatory arbitrage. We are certain that 2019 will beat 2018 in Fintech innovation and will surely be a remarkable year for stakeholders.

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