With 2021 on the roll, a new generation of financial technology dominates the market. With digital-only solutions becoming increasingly popular in the market, there are better opportunities for businesses to bank on customer needs. Without technology, it is impossible to survive the highly competitive market and deliver a good customer experience. When it comes to defining capital market trends, merchants act as a driving force, and fintech is no exception. Where Fintech 2.0 focuses more on the B2C market, current advances in technology introduce fintech 3.0 which is concerned with the B2B landscape.
Current Fintech Landmark
The financial crisis of 2008 took a toll on the banking and payments industry. This had a direct impact on consumers as well as businesses operating in the financial space. The continued uncertainty at that time led to the disruption in the value chain, driving industry giants to look for better financial solutions. According to a study, 92% of the total millennials, have little to no faith in the traditional banking system. One of the main reasons for this was the decreased revenue growth and a gap in the financial market.
The downfall of the financial system created a greenfield opportunity for technology firms to provide solutions in streamlining the industry. This led to the development of financial technology, commonly known as FinTech these days, offering a wide array of payment and banking services. With the advent of fintech, banks were no longer the exclusive industry players dominating the market.
How Fintech 3.0 and B2B are related?
Fintech 3.0 is all about B2B, allowing retailers to capitalize on technology trends to drive innovation in the complex fintech world. B2B fintech is already underway with investors moving away from the Business-to-Consumer (B2C) club, to bridge the current value gap in the market.
The development of tech products and services has introduced a shift in investor appetite towards B2B fintech companies. Even though the pandemic had its effects on B2B services, it is still a haven for investors as opposed to B2C. Fast-paced millennials, being the major reason for the B2C fintech mayhem, force merchants to shift their services to other businesses rather than consumers.
Inclusion of Technology in the Financial Sector
Today, fintech is not limited to freedom in digital transactions, but it also protects the financial data of online users to prevent identity theft using technology. With fintech offering remote payment solutions to consumers, traditional banks and financial institutions had no option other than to adopt the technology. With solutions based on financial technology, online businesses can now deliver cost and time-effective services to consumers, over a secure channel. Below are listed some technology trends which are revamping the financial industry.
Gone are the days when bank customers needed to wait in long queues to get a cheque cleared. A user would always prefer a product or service that is easy to use and offers them a safe and secure channel. With progress in financial technology, banks can easily onboard customers and provide them with effortless transactions.
Bank visits are expected to fall to 36% in 2022, due to the influx of new and improved solutions in the market. Digital-only banking allows users to pay their bills at the comfort of their homes, without the hassle of paperwork. Moreover, fintech-based services can allow banks to keep their customers’ identities protected from cybercriminals.
Fintech when powered with blockchain has the ability to work wonders. Blockchain is the key innovator in financial technology that can offer consumers secure payment options using encryption. The purpose is to convert user data into machine-readable form, safe from external interference. According to the research by Juniper, a 30% growth in cross-border B2B transactions is expected from 2020-2022 with the inclusion of blockchain in fintech, which reinforces the idea of Fintech 3.0 in the financial sector.
A staggering 3,150% growth from 2019-2023 is estimated with intelligent chatbots interacting with customers on mobile banking applications. Artificial Intelligence and its subdomains like machine learning, computer vision, and natural language processing have revamped how fintech delivers its services. Customer behavior can be analyzed using AI-based products to deliver tailored services. Moreover, enterprises can assess market trends and growth to make a future roadmap of the services they have to offer to their partner entities. This way, the B2B marketplace becomes an ideal platform for fintech service providers to offer their services to customers and businesses alike.
To wrap it up, B2B enterprises can bank on existing trends in technology by adopting a smart fintech solution. With intelligent technologies, businesses offering financial services in the market can associate ties with trusted partners and entities. It gives the enterprise a sense of security and a good reputation in the market as well.