The world of fintech is ever changing and those who stay on top of emerging technologies will ultimately succeed.
There are five innovative technologies that assist and enhance the efficiency, security, and ease-of-use of fintech. These innovations are:
Artificial Intelligence (AI)
Regulatory Technology (RegTech)
This is a term that refers to a massive amount of data, both structured and unstructured. We call these pools of data, data lakes. In the internet age, data is produced at breakneck speeds. For some perspective, smartphones have around 100 gigabytes of storage. A jet plane flying for 30 minutes will produce over 10 terabytes of data, 100x more than the storage of your phone.
So, big data is the management, organisation, and optimisation of these massive amounts of data that we produce every second of our online lives.
All this data is useful when it is processed into helpful information for companies, individuals, and governments. A large set of organised data about a particular product allows us to make educated decisions about the performance of a product – this is called analytics. Using Artificial Intelligence (AI) and Machine Learning (ML), these enormous data lakes become a lot easier to navigate and organise.
No longer a thing of Sci-Fi films, AI is real and here to stay. AI is a wide branch of computer science concerned with building computers that can perform tasks that usually require human intervention.
AIs in fintech help deal with substantial amounts of data by identifying patterns and regularities within a data lake. Processing this amount of data would be impossible for humans, and this is why we need the help of AI which can process massive amounts of data in seconds.
Within a fintech such as Ozow, AI can be used to identify fraudulent activity. By flagging repetitive patterns it finds within the transaction log, like the same transaction being made over and over, an AI program effectively becomes a fraud detection agent.
RegTech is a class of software applications pertaining to the managing of regulatory compliance. This is effectively an application that handles the compliance and regulation of a company with minimal human involvement.
RegTech applications are made purely to improve efficiency within companies. Through effectively “outsourcing” the process of dealing with regulation, this form of software frees up time and reduces the number of mundane tasks employees need to perform.
This is a form of security that verifies an individual using pieces of who they are. The verification process scans the physical things that make us unique – like our faces and fingerprints.
The improved security and speed of biometrics are what make them so appealing. The increasing amount of smartphone users allows for a steady increase in the adoption of biometrics in fintech. Almost all modern-day smartphones use biometrics as a form of identification and security. Pair this with banking, and you get a safer and faster method of making payments.
As simple as it sounds, mobile banking is just that: the ability to make financial transactions on a mobile device. Although it’s simple, the implications of such technology have been revolutionary, especially in Africa.
Mobile banking has opened many doors in the name of financial inclusion. It has been responsible for the steady increase of financially active individuals. It has allowed people who have never been able to participate in the economy, to now do so. That said, its full potential has not yet been fully realised, but mobile banking will continue to create economic opportunities for everyone.
These five emerging technologies within fintech show great promise and have been responsible for revolutionising the industry. It is an exciting time to be involved in this space as it continues to evolve and mature. For more innovative information, keep up to date with our blog page.