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The Evolving Fintech Industry: Current + Future Trends [Infographic]

In the finance industry, there has been an emerging innovation that focuses on improving financial services with the use of technology. Smartphones and cryptocurrency are just a few technological examples that are becoming more regularly accessible. This is called Financial technology, also known as Fintech.

Fintech is defined as a combination of technology and finance, where technology is integrated to improve the delivery methods of financial services.

This evolving industry has resulted in the introduction of startup companies, along with stronger already established institutions that intend to transition and enhance their current financial services.

In the last year, 2018, fintech investments were up to $30.8 billion from 2011 where it was reported $1.8 billion in investments. This demonstrates a significant increase in interest which is making this industry so successful.

Current Fintech Trends

TREND#1: HIT A NEW GLOBAL RECORD

In 2018, it was reported that countries such as the United States, United Kingdom, and China are accounting for 39% of fintech deals which shows the capability of a growing industry on a global scale.

Among these countries, Asia is reported to have the biggest boost in deals with 38% YOY as funding has been raised to $22.65 Billion.

TREND#2: FINTECH UNICORNS

With an increasing interest in fintech, 16 fintech unicorns have emerged in 2018 alone. The term unicorns are to represent successful privately held companies that are valued at one 1 billion.

Currently, 38 fintech unicorns exist globally with a value of $147.37 billion.

TREND#3: EXPANDING

In 2019, it was reported that fintech firms are  beginning to expand their lines of business resulting in the following:

  1. Smaller financial companies to be bought out.
  2. An establishment of partnerships between companies
  3. The rebuilding of their offered services to create a competitive edge.

TREND#4: DEPOSITS

Fintech companies are racing for customer deposits. Attaining deposits means acquiring money through interests and a possibility for future products (for eg. savings and investment accounts). This will set companies for future growth.

TREND#5: MILLENNIALS

In a survey conducted by Morgan Stanley in 2017, it was reported that millennials are

 

86% very interested or interested in sustainable investing

61% made at least 1 sustainable investment action in the last year

75% think their investments can influence climate change

This indicates that millennials are currently looking for choices that have a positive return on investment (ROI) and impact. This is good news for fintech companies that intend to establish services for specific markets.

Future Fintech Trends

TREND#1: BLOCKCHAIN

As blockchain begins to evolve from a retail focus to more institutional use, blockchain is expected to become an essential part of fintech. Blockchain will assist in tracking the lifecycle of a financial transaction, create security, and assist in the functionality of financial services.

According to the global market, blockchain is expected to reach 7.6 million USD and with 77% of financial service, incumbents to adopt blockchain technology by the year 2022.

TREND#2: ADVANCES IN ROBOTICS AND AI

Advances in robotics and AI will assist in reducing costs and mitigate risks among financial services. This technology contains the capability for natural language processing, contains physical sensors and the ability to navigate, and a social-emotional intelligence which will allow the completion of complex tasks throughout the full cycle of a financial transaction.

TREND#3: RISKS IN CYBER-SECURITY

In 2016, a global CEO survey reported 69% of financial services CEOs were somewhat or extremely concerned with cyber-threats. It is suggested that due to the changes in the following years, such as third-party vendors, advancements in more complex technologies, and increased use of mobile technologies by the public, this will generate an increase in security threats. Fintech companies will need to develop new ways to address these situations.

TREND#4: CASHLESS ECONOMY

With the spread of mobile technology, there is also an emergence of contactless payment systems like Alipay and WeChat Pay. Contactless payment systems have been willingly adopted and actively used in Asia, specifically China, where it is demonstrating a huge interest to transition to a cashless economy.

In China, it is reported that

38% of the public use WeChat

54% use Alipay

8% choose to use other options.

What does this mean for UX Design?

As technology and advancement in the fintech industry continue to evolve, what are some of the UX design trends that can emerge in the fintech industry?

TREND #1: UNDERSTANDING CUSTOMER NEEDS

One of the key factors that will affect the development of the financial industry is customers and their needs. As technology advances, fintech companies will begin a more customer- centred approach in order to understand the capabilities of this technology with customer intelligence.

In future years, companies will begin to find ways to understand customer interaction in order to develop a seamless connection between technology and humans.

TREND#2: PERSONALIZED CUSTOMER EXPERIENCES

To enhance customer experiences means to create a personalized experience for each customer. As a result, the customer will be encouraged to see financial services as more than just service providers. This can influence the impact of customer experiences through the generation of a positive response.

This requires a specialized understanding of how to map a customer journey through financial services and find ways to maximize their experiences. This could relate to enhancing the functionality of financial services, identifying user insights, or increasing the speed and convenience of these transactions.

TREND#3: UTILIZING PROACTIVE INSIGHTS

Companies that understand the benefit of proactive insights can leverage themselves among other companies as this can provide predictive analytics. This will lead to a better understanding of how to improve services for their customers. Additionally, this can lead to services that can combat risks to cyber-security through services that offer fraud prevention, and ultimately lead to enhanced customer experience.

TREND#4: IMPORTANCE OF INTERACTION

With the advancement of AI technology and AR/VR, this brings greater importance in customer interaction. UI and UX principles will be required to assist in creating a seamless engagement between humans and AI/AR/VR technology.

Ant Financial Group introduced a VR-based payment service which allows customers to shop and pay in VR mode.

To know more about UX guidelines for fintech have look here.

Full infographic:

Conclusion

In summary, the future of financial companies and fintech will demonstrate a highly integrated technological advancement which might require changes in their platforms, offered services, and business models.

Year by year there is an emergence of fintech unicorns and the act of partnerships, rebuilding, or buying of other companies. How does one find leverage? Through a more customer-based approach, this can create a more positive customer experience which will lead to greater ROI.

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What Next

Idea Theorem is a Toronto based UI UX Agency. We create simple and usable products for web and mobile. Our human-centred design approach lets us understand your customers, identify their pain points & deliver solutions that enhance their experience with your brand. Contact Us if you have any questions and we will be happy to help you.

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User Experience

UX Guidelines For Fintech

Financial technology or Fintech for short is broadly defined as any technological innovation in financial services. The products or services are often innovative and there to disrupt the existing financial businesses. Fintech is impacting how individuals and businesses manage their startups. Their innovation is driven from a variety of sources such as tech companies, e-retailers, and social media. Fintech has become a multi-billion dollar industry. Startups are dominant players in this market.

[qodef_blockquote text=”In Q4’17, global investment in fintech companies hit $8.7B across 307 deals” title_tag=”h5″ width=””]

KPMG

Creating the right user experience is important for fintech companies. Fintech product or service should be user-centric, intuitive, effective and enjoyable. The product or service should give a feeling of trust, honesty, and understanding as users will be relying on those companies with their money and life savings.

[qodef_blockquote text=”Fintech is constantly changing it’s dynamic over the years, it is difficult to know what will work and what will not work.” title_tag=”h5″ width=””]

As fintech is slowly becoming saturated and competitive (as everyone wants to be part of such a massively disruptive technology), hence new startups need to make more innovative products to stand out. Here UX and its components can help. Traditionally (and I have seen this personally), many companies have just treated UX as an afterthought to their product or service. The product owners would be concentrating on creating the functionality and that would be it. These days, UX has become an integral part of product or service creation for easy user adoption.

We have recently completed a fintech project and realized that there is not much content out which talks about designing for fintech. We thought we will share our tips to design for fintech.

Before we start, I should tell you that UX designers are faced with a lot of challenges while designing a perfect user experience for fintech. Some of them are:

  1. Creating a smooth and clear user experience for the user
  2. Creating a feeling of trust with the user
  3. User should feel secure in the world where privacy is just a word
  4. Understanding of the product is crucial

UX Guidelines for Fintech

Know your audience

Do user research well. Create personas to understand your audience. Do user interviews, understand their agendas, goals, their current behavior. Don’t just think that target audience is everyone.

Onboarding

Spend time on creating a perfect onboarding experience for the users. This is where you will know whether the user will use the product or leave. Make them understand what your product can do for your users through a series of storytelling.

Data visualization

Nobody likes boring text and excel sheets of just numbers. Users will spend more than half of their time understanding what each number means. Represent data in attention-grabbing visuals. Create data that can be interactive.

Mint App
Mint App
Spendee App
Spendee App

Start small

Most of the founders have a lot of ideas which they want to incorporate into their product, that NEVER works. Always start small with a minimum viable product (MVP). When an MVP is released, you will understand your audience better and you will also get a good feedback on your product. This way you will spend your budget in a modular way without wasting it to creating functionalities that might not be used by the users at all.

Emphasis on security and trust

With privacy and security being lost in the digital world these days, people are skeptical to trust a digital product. Emphasize on security. Create 2-step verification process, add bio ID, design seamless digital passcodes.

Wavy App
Wavy App

Offer support

Offer support to users. Have a detailed FAQ page, 24×7 customer service through chat, email or call.

Encouraging users to save

The main aim for the fintech products is to help users save money. With fintech products like bookkeeping, budgeting, and investing on the rise, these products need to be designed in a way that creates healthy financial habits and continued use of the product to help the user understand where their money is going.

Inclusive Design

Make sure your designs are inclusive for different users such as users with low vision, any type of blindness, motor and impairments.

Final Thoughts

Keep designs simple and effective. Make users trust you and give them a feeling of security. If you have any questions regarding for designing for fintech, give us a shout.

What Next

Idea Theorem is Toronto based digital agency which creates simple and usable products for web and mobile. Our human-centered design approach lets us understand your customers, identify their pain points & deliver solutions that enhance their experience with your brand. Contact Us if you have any questions and we will be happy to help you.

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User Experience

Fintech Pushing Hard For Cashless Society

We wanted to share our learnings after partnering with a fintech, to help with building their product. It is a privilege to partner with companies – where innovation and prototyping is alive and kicking… where status-quo is looked down upon. The culture is set up to encourage new ideas and learn from their mistakes and always keep reminding themselves of their vision. It is also really important to create a target audience by doing UX research and creating lean personas.

Promote a Cashless Society

Mobile wallets, contactless payments, wearables – all these technologies are encouraging us to get away from cash. As fintech companies are taking major risks with new technologies to get a breakthrough with their customer and win them over with convenience. Trust is one of the biggest challenges, but they are pushing hard for a dream of a cashless society.

They are Fearless

They are looking to challenge every fundamental principle we take for granted. And especially with banking industry being fairly old and lucrative, comes a lot of opportunities. Most of the larger companies are so focused on optimizing their existing process, instead, fintech companies are rethinking the way we will do transactions from the ground up.

Keep it Simple

The mindset starts with, how can we make it as simple as Amazon’s one-click button. What can we do to avoid more than one step? Also, questions are always raised such as is there a way we can make it more intuitive for the user? Interestingly, the thought doesn’t start with how customers are interacting and doing transactions with the banks today, it’s more about how the consumer of the fintech solution would interact.

Again, the project is still ongoing and we have learned a lot partnering with a fintech company. Stay tuned for an upcoming article about UX design for fintech.

What Next

Idea Theorem has recently launched UX Audit services for you to understand where you are missing pieces to gain more user base. You can also check out DIY UX Audit where we have provided you with our insights that will help your business grow.

Idea Theorem is Toronto based digital agency which creates simple and usable products for web and mobile. Our human-centered design approach lets us understand your customers, identify their pain points & deliver solutions that enhance their experience with your brand. Contact Us if you have any questions and we will be happy to help you.