5 tech trends according to McKinsey report, and their role in e-commerce
Digital! This word complemented almost every one of our actions in 2020. And as digital processes are gaining momentum, it is important to understand which trends are most meaningful to us. I will answer this question using McKinsey’s report ‘The top trends in tech’.
In the next decade, according to entrepreneur and futurist Peter Diamandis, we will make more progress than during the past 100 years combined, as technology transforms health, energy, transportation, and a wide range of other industries. The opportunities for corporations are wide. For example, 3D and 4D printing technologies with new generation materials, computer vision, Al, augmented reality, etc. All this also applies to the fintech sphere. The report presents us with 10 main tech trends, but we will consider only those directly related to our specialization — fintech.
Trend 1. Next-level process automation and virtualization
Technological power is fueling the first of ten trends in which robotics, the Internet of Things (IoT), 3D or 4D printing (AM) combine to streamline day-to-day tasks, improve operational efficiency and accelerate time-to-market. Across all industries, about 10% of today’s manufacturing processes will be replaced by AM by 2030.
Why is it important for the fintech industry
Fintech requires regular complex operations and paperwork. Automating them is a fintech trend in 2021. Online banking gives customers the ability to receive electronic checks and invoices. Banking apps have become a place for bookkeeping and even legal services. Some banks are well aware of the benefits of automation. For example, the Royal Bank of Canada uses RPA (robot process automatization) to transfer money, pay bills and process bank statements via chatbots.
Trend 2. The future of connectivity
The second trend is combining fifth-generation (5G) cellular networks and the Internet of Things (IoT) to provide fast connections over long distances with exponentially faster downloads and near-zero latency. Network availability and capabilities will drive wide-ranging shifts in the business landscape, from digitizing manufacturing (through wireless control of mobile tools, machines and robots) to decentralized energy delivery and remote patient monitoring.
Why is it important for the fintech industry
Ultra-fast connectivity supports the creation of new services and business models associated with smart sensor-powered products and creates the potential for companies to personalize offerings more smoothly. For example, many people do not understand finance and do not have enough time to educate in this area. However, the majority is aware of the need for savings, investment and competent allocation of funds. A trend is autonomous finance that can take care of its safety and prosperity on its own. For example, artificial intelligence itself will dispose of the amount allocated by the client, investing it monthly in the most promising stocks, paying bills and sending it to a savings account. So people will get the maximum benefit with the minimum cost: money and time.
Trend 3. Applied Artificial Intelligence (AI)
The next trend is using AI algorithms to train machines to recognize patterns, interpret and act on them. AI helps computers make sense of real data, including video or images (using computer vision), text, and audio. This trend promises to increase customer satisfaction through new interfaces and interaction methods, such as searching for products on Amazon using photographs. The report estimates that by 2024, more than 50% of users’ touches will be complemented by speech or computer vision algorithms.
Why is it important for the fintech industry
The coming explosion of AI will expand nearly every aspect of human-machine interaction and bring automation to the next level for both consumers and businesses. AI in fintech has made it possible to increase bank profits, predict, and make accurate decisions. According to the findings from the Emerging Technologies study, companies using AI in finance and operations increased their annual revenues by 58% and their annual profits by 80%.
Trend 4. Trust architecture
The trend describes a set of technologies and approaches developed for a world of growing cyberattacks, a world where more than 8.5 billion data records were compromised in 2019 alone. These structures are designed to test the reliability of devices when transferring data over networks, APIs, and applications. Trust architectures can include, for example, distributed ledger technologies (DLT), one of which is blockchain. In addition to reducing the risk of compromise, trusted architectures reduce the cost of complying with security regulations, lower cybersecurity-related operational costs, and enable more cost-effective transactions, such as between buyers and sellers.
Why is it important for the fintech industry
The blockchain came around several years ago, so we just have to make the most of its capabilities. He assists in data protection, transaction registration, investments, risk management, contract signing. This breadth of use is due to the safety and reliability of the technology, so you can expect the same diversification in 2021. This trend in the context of fintech is cryptocurrencies that have gained our attention in recent years.
Trend 5. Future of clean technologies
The latest trend reflects new technologies to meet the rapidly growing demand for clean energy production. These include smart grid distribution systems, energy storage systems, zero-carbon energy production and fusion energy.
Why is it important for the fintech industry
The development of clean technologies also promises an abundant supply of green energy to support the exponential growth of technologies, for example, in the field of high-power computing. Technology and clean energy are interrelated concepts that, when properly combined, become one — clean technologies. I talked in detail about green energy and technologies of the 21st century in the blog “How cryptocurrency mining can affect the future of `green energy`”.
I managed to identify the 5 most relevant trends for the fintech industry. I believe that they are the ones who will shape the ecosystem for the foreseeable future. If we manage to implement them into financial solutions in the next 10 years, then the financial sector that we are used to will radically change its external and internal world. It remains to be seen who and when will become the driver of new technologies in fintech.
