For much of the world, 2020 was such a bad year that it has almost become a joke. The pandemic caused chaos in our personal, professional and social lives.
The financial and fintech worlds were turned completely upside down. Companies were forced to adapt to a rapidly-changing set of restrictions and challenges; customers had an ever-evolving set of needs and companies needed to learn quickly how to meet them with limited resources.
As a result, a number of major changes quickly unfolded in fintech. Now, with mass-distribution of COVID vaccines, it seems as though there is a light at the end of the tunnel: the end of the pandemic may be in sight. However, many of the trends that developed in the fintech world as a result of COVID are likely to stay long after the virus loosens its grip on global society.
One of the most significant trends that the fintech industry has seen so far in 2021 is the growing popularity of alternative assets–namely, cryptocurrencies.
Cryptocurrencies have steadily been gaining popularity since their inception around 2010. This growth was accelerated in late 2017 with the initial coin offering (ICO) boom and the short-lived Bitcoin run to $20,000. However, since the start of the COVID-19 pandemic, changes in monetary policy around the globe have led a growing number of individuals and institutions to seek new ways to protect and grow the value of their savings.
Of course, the most prominent example of this is Bitcoin (BTC). Since late 2020 and into the start of 2021, a number of major corporations have added Bitcoin to their balance sheets, including Tesla, Square and MicroStrategy. Additionally, a number of major banking institutions have begun to offer Bitcoin-based investment products to their clients.
“Fintech’s trend to look out for in 2021 is the Enhancement of Digital Collaboration,” said Jake Smith, Managing Director of Absolute Reg. “Most of the financial sector has adopted remote work arrangements for the near future in reaction to the COVID-19 pandemic.”
“As a result of the change, there is a high demand for digital tools that can help people collaborate more effectively and safely,” he continued. “Not only must physical documents be transferred to digital format, but companies must also figure out how to make such files accessible to remote workers without compromising data protection or creating version uncertainty.”
And indeed, there are quite a few kinks to work out when it comes to cybersecurity and remote work. “Rather than introducing a dedicated, all-in-one solution, organizations often rely on a number of incompatible software applications and improvised workarounds to satisfy their viewing, editing and document management needs,” he said.
“Unfortunately, these haphazard solutions introduce inefficient third-party dependencies, expose data to unnecessary risk and increase the likelihood of human error,” Smith explained.
How might it be possible to mitigate these problems? “Fintech developers may use SDKs and web-based APIs to combine these features into a single application,” Smith said.
Creating applications that can improve cybersecurity in fintech organizations is increasingly important as fintech companies face new kinds of cybersecurity challenges.
Steve Maloney, Executive Vice President of Acuant, told Finance Magnates that: “there were new types of fraud introduced during COVID, but some that will continue to be pervasive are synthetic fraud and muling.” According to Investopedia, synthetic fraud happens when a criminal combines real and fake information to create a new identity. Muling is when people are recruited as money laundering intermediaries for criminals and criminal organisations, often without knowing it.
How will companies handle these evolving security threats? “[With] more robust, fraud-fighting KYC/AML solutions that can truly verify an identity and uncover the associated risk, essential to doing business,” Maloney explained. “AI-powered risk-decision making with real-time analytics can place trusted users in the fast lane, while suspicious users will be flagged. This will be the basic standard,” he went on.
With thanks to Finance Magnates. The full story is here: https://www.financemagnates.com/cryptocurrency/news/fintech-in-2021-the-years-hottest-trends-so-far-according-to-the-experts/
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