In 2005, Zapa started as the first peer-to-peer lending company that allowed users to take loans without the intervention of banks and financial institutions. The solution offers loans ranging from £1,000 to £25,000. The loan amount is split between multiple amounts so that no one is lent more than 1% of the initial investment.
In December 2018, Zapa was recognized by the FCA as a bank. It has already served over 470,000 people in Britain and lent over £5 billion.
Zapa uses Python in its technology stack – the programming language that brings data to the forefront of the technical revolution. The company’s dev team has built a machine-learning stack that runs on Python and is based on open-source tools like jupyter, Pandas, and scikit-learn.
Technology Overview in FinTech
Blockchain and Regulatory Technology are two of the fastest growing technologies in FinTech at the moment. Blockchain is making heavy waves in the FinTech world because of the transparent mechanisms it offers. RegTech simplifies compliance and governance.
By the end of 2022, Robo advisors are expected to manage $2 trillion in assets. Robo advisors enable users to better manage their investments by going through data and building a profitable portfolio.
Superior banking-related chatbot interactions will grow by 3,150% between the years 2019 and 2023. Chatbots are an increasingly popular technology for improving the customer experience. Banks and financial institutions are using chatbots to deliver smooth results.
Top Technologies that are driving FinTech
FinTech requires technologies that offer high levels of data protection. Today, FinTech is all about inclusion and accessibility. Therefore, a FinTech startup that focuses on innovation and the latest technology will be able to make money more accessible to customers.
Let’s have a look at the top technologies that are driving the FinTech industry.
Needless to say, Blockchain is the driving factor in FinTech. Many banks have adopted Blockchain to secure their financial transactions. Blockchain allows companies, financial institutions, and banks to keep a transparent record of transactions. It eliminates fraud and offers a secure way to interact with financial systems.
Blockchain is also making way for decentralized finance. Smart ledgers, crypto exchanges, and more are a result of Blockchain’s decentralized implementation. The technology will eliminate centralized intermediaries, hence making money accessible, transactions cheaper, and providing an overall better digital finance experience to its users.
- Cloud Computing
Cloud has systematized FinTech software engineering. Startups don’t need a ton of money to create a secure infrastructure for financial transactions and digital finance systems. They can deploy products on the cloud and ensure that everyone has access to the solution.
Cloud also enables the financial industry to scale at a rapid pace. FinTech providers are looking for ways to expand their reach. Through cloud computing, they can be accessible in remote regions where digital finance is not available through traditional mechanisms. Cloud computing also simplifies FinTech data management and offers a centralized portal to manage and use the data.
- Regulatory Technology
Companies often struggle with meeting compliance and standards in the FinTech industry. First of all – a lot of confidential data is involved in FinTech. Therefore, meeting those guidelines is crucial for any company. Regulatory Technology makes use of several innovations like AI, ML, IoT, RPA, and more to find the right compliance standards and enable companies to meet them.
RegTech solutions provide assistance to banks and financial institutions in making regulatory decisions. The biggest advantage is that it connects regulatory authorities, companies, customers, and all other stakeholders. RegTech focuses on protecting the interest of all the parties involved in a particular digital finance interaction.
- Internet of Things
Also known as IoT, the Internet of Things is a truly transformative technology in FinTech. Banks and Financial institutions are using IoT devices to execute transactions. They can reduce financial crimes by tracking people through IoT-based card chips. IoT also works well in conjunction with Artificial Intelligence to simplify transaction execution – through voice or gestures.
IoT systems also provide a better way to identify the past behavior of a customer. They can track suspicious consumer behavior and ensure that no fraud takes place. Users can take advantage of IoT to easily make payments, purchase goods & services, and other additional services. Through IoT, financial institutions can take advantage of data and get better insights into a customer’s transaction habits.
- Artificial Intelligence
Intelligent products are becoming the cornerstone of FinTech across the globe. AI and ML-powered robo advisors offer some of the best advisory to clients using patterns and insights from data. Algo Trading is a great use case of Artificial Intelligence in the FinTech industry. Banks are also extracting valuable insights from customer data using AI and ML.
Today, P2P lending platforms are some of the biggest clients of Artificial Intelligence. They use the technology to assess the creditworthiness of a particular borrower. It gives proper insights into their payments history and helps the company determine whether they should provide the loan or not.
- Robotic Process Automation
Every software product engineering company knows the importance of Robotic Process Automation. RPA is an effective technology to simplify process and business operations management. It automates the workflow, enabling banks and financial institutions to focus more on serving their customers. RPA also helps in automating customer onboarding processes, leading to a better experience.
Conversational banking is one of the latest advancements in FinTech. Chatbots are becoming a bigger part of the entire financial system. Customers prefer talking to chatbots rather than the support team, as they get quick responses. RPA is also valuable in collecting and extracting data from financial reports.
- Web Technologies
Last but not least, the growing number of web technologies are simplifying software product engineering services in the FinTech industry. Big data analytics, Python, Java, React Js, and more are the primary web technologies that are enabling the FinTech revolution.
Stock trading platforms, cryptocurrency exchanges, FinTech portals, and super apps – all use the latest web technologies to build innovative solutions. Python, R, and Go are three of the best programming languages that enable FinTech app developers to build interactive and unique digital finance solutions. A trusted software engineering partner offers the resources to utilize the latest web technologies for FinTech development.
Apart from the above 7 technologies, Web3, CBDC, and hyper-automation are other technologies that are simplifying the FinTech world. Today, these technologies make FinTech more accessible, inclusive, and decentralized. Therefore, companies need to focus on how they can best use these technologies to enhance the digital finance industry. FinTech is transforming, and these technologies are the key drivers of bringing that change.
When it comes to innovations in FinTech, most companies only talk about Blockchain. However, they are forgetting other technologies that are leading the FinTech revolution. Blockchain, along with AI & Machine Learning, will enable banks to achieve better outcomes and deliver a great customer experience. A good strategy for such FinTech development in place will help the company in a better way.
Therefore, having a product software engineering partner who can create such solutions by using the above technologies makes sense for enterprises and startups. It can offer the right technical assistance for FinTech products and services. Only by implementing these technologies in a holistic manner and regularly banks and financial institutions will be able to gain an advantage.
A FinTech startup can greatly benefit from the latest technologies in FinTech. Here are the top 7 FinTech technologies and innovations that startups should embrace.