# The Role of Fintech in Shaping Innovative Future
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-01-04
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Top Fintech Trends 2021: Blockchain & Biometric
Meta Description: Discover how blockchain and biometric technologies are transforming the financial industry, enhancing security and convenience for customers.
URL: https://financedigest.com/the-role-of-fintech-in-shaping-innovative-futurehtml

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The advances in financial technologies continue disrupting business landscapes, from retail to banking. To make a transaction and receive experts’ advice, customers search for more accessible and digitized ways to satisfy their needs. Financial technologies, or fintech, enable enhanced financial services that can serve the rising demands of modern customers.

According to the State of Venture Q3’21 report, fintech investments have set a record-high $91.5 billion in 2021, almost [double overall investments](https://www.financedigest.com/brexit-no-obstacle-as-chinese-overseas-property-investment-doubles.html "Brexit no obstacle as Chinese overseas property investment doubles") in 2020. With the help of blockchain, [artificial intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "Types of artificial intelligence"), machine learning, and other technologies that power innovation in financial products and services, businesses can boost efficiency, cut expenses and offer more choices and possibilities to customers and partners.

Over the years, the business world has experienced how [financial software development](https://eleks.com/industries/fintech-solutions/) solutions have become a vital part of the industry. Let’s look at some [fintech trends that are here to stay and transform the future of industries](https://www.financedigest.com/2022-the-year-that-facial-recognition-will-lead-the-fintech-industry.html "2022 – The year that facial recognition will lead the fintech industry").

**1.Blockchain streamlining and securing transactions**

Blockchain technology monitors and records a vast number of transactions within a network. The [decentralised nature of blockchain technology](https://www.financedigest.com/top-5-trends-in-decentralised-self-sovereign-identity-ssi-and-privacy-preserving-technology-in-web-3-0.html "Top 5 trends in Decentralised Self-Sovereign Identity (SSI) and Privacy-Preserving Technology in Web 3.0 ") has the potential to eliminate the need for a third party to verify a transaction.

Moreover, blockchain contains sets of information linked with each other chronologically. The [data recorded](https://www.financedigest.com/ireland-fines-instagram-a-record-400-million-over-childrens-data.html "Ireland fines Instagram a record 0 million over children’s data") in the block and blocks’ order is almost impossible to alter. Therefore, all the sensitive information is hard to access by malicious actors. The enhanced security provided by this technology attracts [banks and financial](https://www.financedigest.com/why-banks-could-stand-to-learn-a-thing-or-two-about-financial-inclusion-from-fintechs.html "Why banks could stand to learn a thing or two about financial inclusion from fintechs") institutions to benefit from blockchain implementations. It is estimated that financial organisations have invested around [$552 million](https://fortunly.com/statistics/blockchain-statistics/#gref) in blockchain-driven projects.

Another area [blockchain is expected to revamp is cross-border payments](https://www.financedigest.com/why-blockchain-could-represent-the-future-of-cross-border-payments.html "Why blockchain could represent the future of cross-border payments"). The current system involves banks and Society for Worldwide Interbank Financial Telecommunication, or SWIFT, to process a transaction. It leads to the high number of checkpoints a transaction is undergoing and the increased process time. Blockchain can streamline a transaction by verifying and transferring all the data [financial entities need](https://www.financedigest.com/cfos-need-a-focus-on-forex-in-financial-planning-tools-accountagility-reveals.html "CFOs need a focus on forex in financial planning tools, Accountagility reveals").

**2.Biometric technologies to improve security**

Biometric authentication technologies use a person’s characteristics and features for identification, including fingerprints, face recognition, and many others. It is a promising solution for [financial companies that can result in better security](https://www.financedigest.com/how-financial-services-are-overhauling-security-to-defend-against-spoofing-scams.html "How financial services are overhauling security to defend against spoofing scams") and enhanced simplicity. According to [Help Net Security](https://www.helpnetsecurity.com/2021/06/11/biometrics-for-banking-market/), biometric technologies in the banking and financial services market are predicted to constitute $8.9 billion by 2026.

Biometric technology used as an alternative to or [combined with traditional security](https://www.financedigest.com/emvco-and-pci-ssc-combine-expertise-on-3-d-secure-2-0.html "EMVCo and PCI SSC Combine Expertise on 3-D Secure 2.0") methods such as PINs and passwords can simplify the customer verification process. Here is the list of most commonly used types of biometric authentication across the [finance industry:](https://www.financedigest.com/theres-nothing-artificial-about-the-role-of-ai-and-data-in-the-finance-industry.html "There’s nothing artificial about the role of AI and data in the finance industry ")

- Voice recognition – uses unique features of a customer’s voice to verify the identity. The [financial institution](https://www.financedigest.com/the-future-of-financial-institutions-in-2023.html "The Future of Financial Institutions in 2023") can gather voice samples from usual conversation so that customer does not have to repeat any prerecorded phrases.
- Fingerprint recognition – probably the most well-known authentication method. It uses a unique print on a person’s finger for identification.
- Face recognition – powered by 3D sensors and computer algorithms, this technology can identify a person by facial features. However, this method is still to be perfected since changes in appearance such as hairstyle change, lighting, or glasses can [lead to erroneous results](https://www.financedigest.com/centre-right-gerb-party-leads-in-bulgaria-election-partial-results.html "Centre-right GERB party leads in Bulgaria election -partial results").
- Iris recognition – uses the approach that recognises complex patterns of a person’s iris. This biometric method minimises the chances of false matches. Image acquisition works best from a distance no longer than two meters, so this [technology can be especially useful for mobile banking or accessing the account via](https://www.financedigest.com/peppermint-technology-revamps-communications-with-via-voice-solution.html "PEPPERMINT TECHNOLOGY REVAMPS COMMUNICATIONS WITH VIA VOICE SOLUTION") ATM.

**3.AI to keep driving** [fintech growth](https://www.financedigest.com/fintechs-must-remove-security-and-compliance-friction-to-unlock-new-growth.html "Fintechs Must Remove Security and Compliance Friction to Unlock New Growth")

According to [Mordor Intelligence](https://www.mordorintelligence.com/industry-reports/ai-in-fintech-market), AI application in the global fintech market is predicted to increase from $7.91 billion in 2020 to $26.67 billion in 2026. AI-powered chatbots can deal with a massive amount of regular requests and free [employees’](https://www.financedigest.com/how-to-deal-with-challenging-employees.html "How to Deal With Challenging Employees?") time that can focus on dealing with more complicated tasks. Such process automation will help [financial institutions](https://www.financedigest.com/what-the-future-holds-for-financial-institutions-in-2023.html "What the Future Holds For Financial Institutions in 2023") conduct more efficient business operations and boost overall performance.

In today’s competitive business environment, customer satisfaction is one of the critical drivers of success. AI-embedded chatbots are accessible round the clock, and their response time minimised to seconds, improving customer experience and engagement.

Apart from handling customer communication, AI algorithms can be applied to the [credit score](https://www.financedigest.com/1-in-5-uk-adults-have-no-idea-what-a-credit-score-is.html "1 in 5 UK adults have no idea what a credit score is") system. Most of the credit systems use age, marital status, and other not that relevant information to decide whether a person can get a loan. Such systems are already obsolete. AI can analyse a specific customer’s behaviours, [credit history and make a data-driven decision about when a person will pay back the loan](https://www.financedigest.com/6-reasons-to-take-a-car-loan-from-a-credit-union.html "6 Reasons to Take a Car Loan From a Credit Union").

**Key takeaways**

Global digitalisation has [changed the way](https://www.financedigest.com/10-ways-automation-has-changed-the-role-of-the-cfo.html "10 ways automation has changed the role of the CFO") companies across many industries conduct their operations, and financial services are not an exception.

From digital [banking to blockchain and machine learning](https://www.financedigest.com/learning-the-lessons-of-the-bangladesh-bank-heist.html "LEARNING THE LESSONS OF THE BANGLADESH BANK HEIST"), there is a wide range of digital solutions that financial institutions can leverage. These advanced [technologies provide many possibilities for companies that strive to meet modern](https://www.financedigest.com/how-is-modern-technology-shaping-our-in-store-experience.html "How Is Modern Technology Shaping Our In Store Experience?") customers’ demands, increase security and streamline business processes.

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Author: Olha Zhydik

Olha Zhydik is a Content Marketing Manager at [ELEKS](https://eleks.com/), a global custom software development company. Olha has been working in the IT industry for over 10 years, including 6 years in marketing. Thanks to her diverse experience, her writing offers a fresh perspective on how [technology can help businesses not only innovatively](https://www.financedigest.com/latam-airlines-reduces-cost-per-user-by-83-thanks-to-innovative-ad-technology.html "LATAM Airlines reduces Cost Per User by 83% thanks to innovative ad technology") solve problems but also gain a competitive edge. You can connect with Olha on Linkedin or [Facebook](https://www.facebook.com/olya.zhydik/).

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