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April 7, 2023

7 Tools Shaping the Future of Fintech

By Rameshwar Singh

Over the last decade, financial companies have spent tremendous amounts of resources on modernizing existing IT applications, procedures, and infrastructure. Now, this investment is starting to pay off as new technologies are helping to improve the customer experience by putting more information and power into user’s hands while also maintaining security and privacy. As we look forward another decade, I believe we will see the following seven tools and developments play an instrumental role in shaping the future of fintech: 

  1. Mobile Apps: Every BFSI (Banking, Financial Services, and Insurance) company wants to reach out to customers with immediacy. Large-scale usage of mobile devices has given evolutionary options to these companies to get to users faster than ever before. With mobile app development, companies can quickly build financial products with lightweight applications. It can be integrated easily with the backend banking systems using Application Programming Interfaces (APIs). 

  2. APIs: With Application Programming Interfaces, fintech companies can externalize their complex software systems for industry use. This creates platforms that allow customers to seamlessly manage their personal financial goals, for example: household budgeting apps, mortgage applications, and more.  

  3. Cloud Migration: No longer investing heavily in owning the IT infrastructure, financial companies now prefer to rent computer and storage hardware and software on a pay-as-you-go model. This option has significantly reduced these organizations’ total cost of ownership (TCO). Now, they no longer need to maintain their operations team as they previously did. The cloud’s scale-up (increase in computer services) and scale-down (decrease in computer services) features have provided dynamic service options for financial businesses.  

  4. Microservices Architecture Design: Microservices have drastically improved fintech software performance and durability. Now, companies can better maintain their software products using different technology stacks and even release the products quicker with this approach.  

  5. Data Insights & Analytics: Data is the brain of the fintech industry. Fintech companies have a plethora of data points, which can be polished, refined, and consumed by analytics systems to enable executives to make better business decisions. For instance, data points can help analysts define the way customers complete a financial transaction – in what fashion, how they leverage financial products to achieve financial goals, what segment of financial products are not working for them, how a specific product line is not performing well in the chosen market segment, where executives need to improve their product offering, and which market is most responsive, etc. 

  6. AI/ML Implementation: Artificial Intelligence (AI) has been providing more insights for fintech companies. AI can help fintech companies predict bad loans, faulty products, and even future economic crashes. Machine learning (ML) is a group of programming languages, tools, and scientific techniques to enable AI behavior in a software product. Machine Learning can guide a software process to dynamically provide more defined fintech offerings to a targeted customer. It can also help automated software work in a more human-friendly way. ML models can help build prescriptive, predictive and high-computing financial products.  

  7. Data Asset Security: Many of the data assets and products available within a fintech organization are scattered across different lines of business, and improved security among these data products needs to be the organization’s top priority. But before starting, it is crucial to identify a data governance practice that can define guidelines around data ingestion, aggregation, refinement, and consumption that follows government laws and industry best practices. Data Asset Security is one of the most critical aspects of the data governance world. It enables data privacy and security using various encrypted tools and practices. For instance, blockchain-enabled data assets are the most secure products shared within or outside the organization per business-agreed contracts. 

Every one of these tools is actively changing the way we do our banking; making things faster, more accessible and secure. This is only the beginning.  

If you want to chat more about fintech or have any other questions, click the “let’s talk” button below. You can also reach out on LinkedIn.