Fintech trends to look out for in 2018
Technology-driven lending and financial services businesses, often referred to as "fintech" firms, rose to prominence in the early to mid 2010s and now occupy a position of note in the overall banking and finance sector. This is readily seen in the rising popularity of alternative lenders, as well as the more inclusive approach some firms are taking to alternative credit.
Given these developments, it will be prudent for lenders and businesses that offer credit to monitor some of the notable trends predicted to affect the fintech field during the course of 2018. We'll take a closer look at some of these today and examine how alternative credit may play a role going forward:
"Potential fintech trends may have an affect on the alternative credit space, and vice versa."
The continued rise of automation
So many of the most common payment and financial tasks are at least partially automated in the present market, ranging from monthly utility bills to certain money transfer operations. Zach Perret, co-founder and CEO of banking data firm Plaid, told Forbes that the prevalence of automation will only increase during 2018 and in the years to come. Potential new automated operations include overdraft protection, transfers from checking to savings accounts and more.
Leaps forward for NFC
Near-field communications capabilities already exist in most smartphones, powering contactless payments at retail outlets, ticket admissions and other operations. Inc magazine posited that with the growth in popularity of wearable devices, NFC components might be incorporated within their design. Much further down the road, the chips might even be biotech-integrated - implanted within the human body.
Broader acceptance of alternative credit
It's unlikely that FICO scoring will be completely phased out anytime soon, due to its familiarity among lenders. But in his Forbes interview, Perret explained that the limitations of traditional credit assessments have already become more visible than ever, which could lead to alternative credit data being used as a complement to classic scoring models.
Increases in regulation
According to Inc, fintech hasn't been heavily regulated since its early emergence, largely due to its development speed. Yet the business news provider stated that it was increasingly likely this would change, as things slow down and fintech becomes more of an everyday reality. As such, lenders should keep themselves abreast of regulatory developments and make sure to readily maintain compliance with any and all pertinent laws.