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By John Rozenbroek Chief Financial Officer at Capify UK discusses the emerging trends fintech businesses should prepare themselves for during 2019/20.

Fintech is revolutionising the way the world does business and with 2020 only six months away, it’s a great time for businesses to consider what investments they may need to make over the next few months to ensure a roaring start to the ’20s.

It’s an incredibly exciting time in the sector, as tech innovators develop convenient solutions for data analytics; the expanded use of big data, and better access to alternative lending. And with fintech growing on a global scale every year, the speed and scale of emerging trends is set to continue on a steady upwards trajectory.

Below we have summarised what we believe will be the five key trends to watch out for during the remainder of 2019.

  1. Alternative lending platforms

Currently, alternative lending is one of the fastest growing fintech industries. More and more enterprises are choosing cash advance loans over their more traditional bank counterparts.

The ease and speed at which you can secure alternative finance is a huge part of their appeal and with simpler payment terms coming into play every year, their popularity shows no signs of slowing down.

Throughout the market, there are reputable alternative lending companies working on a virtual basis, approving credit via phone and email. We’re one of them, and through investment in class-leading technology, us and others are able to harness the power of data analytics and determine an applicant’s creditworthiness with limited fuss.

As more and more SMEs opt for alternative funding, traditional financial institutions are facing serious competition and we think that’s set to increase again in coming months.

  1. Open Banking to play a bigger part in the market

This quiet digital revolution encompasses a series of reforms which monitor how banks deal with your financial information.

Spearheaded by competition watchdog, the Competition and Markets Authority (CMA) and backed by the government, open banking means all UK-regulated banks must now allow customers to share their financial data – such as spending habits, regular payments and companies they use with any authorised provider – offering them budgeting apps or other banks and alternative funding providers as long as the customer gives their express permission.

The reforms aim to make banking fairer and more transparent, whilst hopefully boosting new product development, and whilst awareness is still considered low amongst the public, those in the fintech space should be keeping a watchful eye on these changes.

People remain rightly cautious about sharing their financial data but the number of those taking advantage of open banking is increasing. In 2019, traditional banks, alternative finance providers and fintechs should aim to collaborate better and communicate the benefits of open banking more effectively to remain ahead of the change.

  1. Continued support for crowdfunding initiatives

Crowdfunding sites like Kickstarter and Indiegogo are still proving to be the go-to-sites for start-ups, quite a few years after they hit headlines around the world.

Encouragingly, a lot of people are continuing this altruistic approach and still want to help out small companies or individuals who develop products that pique their interests or play to a niche audience.

So much so, that a number of them invest a good portion of income into getting these projects and products off the ground. There are plenty of success stories too, with many of these start-ups now achieving mainstream recognition, including CrowdCube, BrewDog and goHenry.

Taking their cue from these types of businesses, fintech companies are now looking at how they can capitalise on this receptive market. Investment opportunities are endless and cover nearly every conceivable asset available, so savvy entrepreneurs would be short-sighted not to explore the possibilities afforded by these sites.

  1. A move to safeguard vulnerable end-users

Fraud is becoming progressively complex as the way we pay for goods and services adapts to emerging technologies. With payments now able to be made via contactless technology, the elderly in particular are increasingly susceptible to scammers and hackers.

The fintech industry is aware of this though and over the last few years has made strides to protect vulnerable people from financial fraud. New services are being made readily available, and whilst they aim to allow people to maintain their financial independence, they assist with protecting assets and provide filters to control spending and accountability.

Pre-paid Visa cards come with controls that allow you to block certain merchants, whereas certain apps or services are more aimed at raising “red flag” issues. Apps such as EverSafe do this and alert people if there is a potentially fraudulent activity or if a regular deposit is missing.

  1. The rise of ‘voice’ banking

Recently, AI has become a seamless part of our everyday routines – meaning we can now verbally ask a variety of machines and virtual assistants to make restaurant bookings for us, play our favourite music or even run through our diary schedules – and yet we’re still not quite able to pay for services and goods with our voices. But this could all change.

As more customers adapt to using smartphones for banking services, voice payments are set to become a natural evolution for tapping on the go. Many banks and financial institutions are now starting to offer this service to their clients, with over-the-phone, voice-led safety checks the first step on this progressive path.

During 2019, fintech companies will continue competing to offer more advanced, robust, and secure solutions. And as digital voice assistants become more sophisticated, they’ll go further than simply letting people make payments using voice technology. In the next few years, it’s not an unachievable idea to think computers will be able to communicate with financial institutions on our behalf – handling more complicated matters like invoicing, paying taxes, securing loans, or renewing insurance.

These exciting developments can be difficult to keep up with but it’s not a bad time to be a consumer or a business operating in the fintech industry. Technological advancements mean everyone will benefit from smarter, more secure ways of working, which in the short-term should mean an incredibly exhilarating six months ahead.

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