5 trends for fintechs in 2020 – WAU

Fintech is synonymous with innovation and technology. Companies in the field have experienced an extremely positive “explosion” process in the past two years, but in 2019, the promise is for even greater growth. Want to know what are the main trends in relation to fintechs? Stay tuned for today’s post!

Have you heard of the word fintech?

If it still looks a little strange, at first, think of the famous “virtual banks” that have been gaining popularity in the past 2 years.

Did you associate the meaning now?

However, it is wrong to think that companies in the industry are only those that offer solutions for an online bank account, for example.

Fintechs are growing exorbitantly and, in 2020, the expectation is that they shine even more!

With that in mind, we selected the main trends for this business model. From artificial intelligence to collective loans, you will love to learn more about a business that has come to make everyone’s life easier.

What is a fintech?

The term fintech comes from the union of two words in English, financial (technology) and technology (technology), which summarize a lot what we are going to talk about in the whole post.

Fintechs are basically companies working with technology-based financial services.

They were instrumental in redesigning an entire market: you can’t think of banks and financial agents without remembering bureaucracy and abusive fees.

The idea of ​​fintechs is to reduce as much as possible all the sluggish atmosphere that for so long has been part of the life of any citizen who has created a bank account.

Therefore, it is very common to see fintechs that offer services similar to traditional banks, but almost free of charge, in addition to excellent online support.

The practice eliminates another action that for a long time gave a headache just to imagine: go to the bank and spend hours in line to pay a bill or talk to the manager in case of inconvenience.

At fintechs can be from different branches and don’t just work with the credit card offer:

  • payment fintechs, such as Nubank, which offers the credit card and payment service without charging monthly fees. Branch companies may also offer card machines, for example;
  • credit fintechs, which lend money at less abusive interest than is seen in the traditional market;
  • crowdfunding fintechs or, popularly, “online kitties”. The platforms are responsible for organizing and managing capital withdrawals, all in a practical, didactic and inexpensive way;
  • cryptocurrency fintechs, such as those that facilitate bitcoin transactions, for example. They help a lot to make the process more accessible and understandable to the user;
  • investment fintechs, such as Toro, that transform another process that, for a long time, seemed to be super complex and distant from most of the population. This type of company is responsible for presenting more practical solutions when investing.

Top 5 trends for fintechs in 2020

Now that you know – or refreshed your memory – what this type of business is about, it’s time to learn about this year’s top fintech trends. The vast majority are already in full swing!

1. Artificial intelligence

Artificial intelligence has arrived in the market for fintechs, and is present in most of the services offered by companies.

For example: when requesting to open an account, you are not a person who evaluates order by order.

There is a crossing of data, performed based on artificial intelligence, capable of calculating the profile of the possible customer.

The intersection analyzes the CPF history, in addition to information from Serasa and SPC. Some also say that even a person’s online behavior is studied when granting credit or not.

If the result predicts that he is a “good payer”, he will be approved. Otherwise, you will need to wait a while and try again later.

The automation of processes based on artificial intelligence is excellent to improve the services offered to customers who, quite possibly, have already spent at least one stressful moment with conventional banks.

In addition to promoting greater agility and objectivity in the processes, there is another very positive factor: cost reduction.

Yes, it is necessary to invest a good amount of money in technology, and the process is not easy.

However, when comparing expenses, fintechs save a lot, especially in labor.

Much of the savings, then, directly impact the customer’s pocket, which does not deal with those abusive rates month by month.

2. Credit

We have already advanced a little bit of credit fintechs here, but the forecast is that they will actually grow now in 2020.

One of the main objectives of this type of company is facilitate lending, which can occur in two main ways: the online loan and the collective loan.

In the first modality, which is very self-explanatory, all (or at least most) of the processes are carried out online.

The rates are usually much lower, as the online and automated process generates a significant reduction in labor costs.

Collective lending works basically as follows: several people offer specific amounts of money to one person.

If I need 100,000 reais, for example, I will capture this amount of people who each offered specific values.

3. Blockchain

It is very difficult to talk about technology companies without mentioning, at least once, the cryptocurrency boom – like Bitcoin.

The blockchain is a type of database that stores all transactions (yes, all!) carried out with Bitcoin.

They are available to anyone and everyone who wants to see them: thus, it is possible to observe transactions carried out between a person from Alaska and another person from Mexico, for example.

However, greater details are protected, since confidentiality is one of the pillars of virtual currencies. The only thing we know is that the transaction took place and was made between two specific locations on the globe.

All transaction information is stored on a series of servers, in the form of a collective record.

Investing in the cryptocurrency market allows the blockchain system to become something increasingly secure. Some of its main advantages are:

  • cost reduction;
  • practicality;
  • inexistence of links with government institutions;
  • transparency.

Transparency is a very important aspect and increasingly demanded by citizens, especially in relation to large companies and governments.

With the use of the blockchain chain, it is possible to have a complete notion of important transactions that, for a long time, remained hidden and subject to dubious actions on the part of economic giants.

When talking about the expansion of blockchain and its importance to the fintech market, you can’t help but read about the recent action of C&A.

They adopted the method to promote greater transparency in the fashion world, avoiding the financing of businesses that invest in slave labor, for example, by brands.

4. Payments

You most likely do not have fond memories of that time when you had to go to the bank or lottery agencies to pay the bills.

In addition to the displacement being, by its nature, impractical, the queues, delays in attendance and the bad opening hours of the banks transformed the process into something “painful” for the citizen.

One of the very good advantages, which adds the fintechs benefits package, is the possibility of making payments and transfers online with agility and efficiency.

Another very important point concerns bank transfers. Currently, TED rates reach around 20.00.

Paying such a high amount whenever a transaction is made is already an attitude that generates aversion on the part of the customer.

The solution of companies like Nubank, to allow transfers without costs, is the generation of bank slips.

Whoever has an account can generate a certain amount of bank slips that, in turn, are sent to the person who will make the payment, without any additional cost..

Payments, in turn, can be made on the cell phone, that is, the cycle closes correctly in an automated way, full of technology and practicality.

5. Open Banking

We have already talked a little about Open Banking in practically all topics in this post.

The solution, which only grows in London and in the world, promises to win the hearts of everyone who has tired of giving too much money to the bank amid a lot of bureaucracy.

Let’s think, initially, about the traditional model of banks: in addition to all the questions that have already been asked here, there is the fact that the bank itself is the “owner” of all processes.

In other words: it needs to invest and invest time and resources in any and all services it offers.

In the case of Open Banking, the advantage comes in the possibility of other companies developing useful applications for the financial institution.

This kind of “outsourcing” is essential to reduce costs and improve processes, as the bank can focus on critical topics that prevent it from performing better.

A bank can hire a company to develop a cost control and management system, for example, adding value and adding another interesting service for the customer.

In addition, the bank acquires extremely valuable information about the user, such as buying habits, monthly income and investment profile, for example.

Open Banking promotes a kind of community among fintechs, technology companies as a whole and developers, as well as other companies in the financial sectors.

Among all the trends presented here, the lesson that remains is that, currently, less bureaucracy, cost reduction and even heavier investment in technology are the pillars of the market.

Whether to invest, or to learn more about or engage in some fintech, be sure that your growth potential in 2019 will be even more surprising than previous years, that is, it is worth keeping an eye on them!

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