Trends to look forward to in fintech 2017
Fintech is an ever-expanding field that, according to Investopedia, comprises “any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even cryptocurrencies like bitcoin”. Fintech is constantly in flux, innovations crop up faster than we can name them while legacy systems and technologies fight to remain relevant.
Every year fintech brings something new. Here’s what we think will be the top fintech trends of 2017.
The maturation of blockchain
Most people use the terms “blockchain”, “cryptocurrencies” and “bitcoin” interchangeably, but they’re not the same thing. We hope this clears up the confusion: blockchain is the underlying technology that makes cryptocurrencies like bitcoin possible. But it can do so much more than that. John Kennedy, in a Silicon Republic piece entitled The fintech future: Why 2017 will be the year of blockchain, clarifies: “The technology actually holds the key to new ways of managing identities, security, and entire networks – it could underpin the structure and future of technology as we know it.”
With bitcoin, blockchain stores encrypted records of financial transactions. But the technology itself can be programmed to store any kind of encrypted data. Everledger is an Australian company that uses blockchain to record the ownership and transfer of diamonds and valuables. The same principle can be applied to any supply chain and, according to Everledger, is already reducing the rate of fraud in the diamond trade. Kennedy says that blockchain success will depend on how willing people and institutions are to educate themselves about the potential uses, which include Cloud storage, legal contracts and secure online elections.
Mobile payment solutions we can count on
The mobile payment market will hit $780 billion (about R10 trillion) this year. This lends some legitimacy to Visa’s prediction that mobile payments will be standard by 2020. There are a few drivers responsible for the mass adoption of mobile payments, chief among them being the prevalence of smartphones. Another of the drivers is how mobile payments increase financial access. Africa, for instance, makes up half of the global mobile payments market because of solutions like M-Pesa which give financial access to formerly unbanked populations. One final driver that has boosted mobile payments (and is likely to spur the boom in 2017) is how enthusiastically they have been embraced by consumers. Mobile payments have proven to be safer than they were initially thought to be, and the convenience they bring has won them the support of digital natives, who already are comfortable using their smartphones for business and leisure.
Better, smarter payment security
The PIN and the password will slowly start to disappear as biometric authentication rises. In the future all you’ll need to authorise transactions and access your accounts will be your fingers, voice or eyes, and this could start happening as early as this year.
MasterCard already has what’s being colloquially referred to as “Selfie Pay”, and Samsung’s next flagship smartphone the Galaxy S8 will support iris-scanning authentication for payments and Wells Fargo is exploring “voiceprint” authentication.
Fraud detection and prevention will also improve, thanks to strides in machine learning and the artificial intelligence landscape in general. MasterCard’s Decision Intelligence is a fine example of how machine learning can be used to proactively seek and eliminate security threats in transaction processing.
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