2017 Trends: The Synthesis of Mobile and Digital Technology

Increases in smartphone ownership, couple with more advanced mobile payment technologies, are altering the way business is done around the globe, and are making it crucial for mobile payment providers to not only track, but also adapt to what’s trending within mobile and digital technology. Here are three particular digital trends set to transform mobile financial services as we move towards 2017:
Virtual Currencies
Since 2008, bitcoin’s emergence has been influenced by a wide variety of factors that have made it one of the most volatile currencies in the world. Despite its instability, more than 100,000 bitcoin transactions are taking place every day and the amount only continues to grow, largely due to bitcoin’s transformative, peer to peer block chain technology which stores information in computers around the world, and is constantly updated in real-time to reflect changes in stock, sales and accounts. Where the bitcoin is likely to have the biggest impact going forward is in the global remittances market.
Today, remittances are playing an increasingly important role in the economies of developing countries, supporting families and communities in some of the poorest parts of the world, and even nearly on par with the amount given in global financial aid. In fact, the World Bank estimated remittances to developing countries alone grew 6.3 per cent in 2015 to 414 billion dollars, and will reach 540 billion dollars by the end of 2016.  However, large amounts of current remittance transfers are lost to high charges by corporate intermediaries, with an average of 7.60% of the amount sent, while the transfer process itself can take up to 5-6 days. These high fees and delays are pushing migrant workers to look for alternative ways to send money to their home countries. As bitcoin transactions can be verified, settled and signed off by the network for free within an hour, they make the ideal solution. This virtual money can then be converted back into a conventional currency at a competitive exchange rate for withdrawal by recipients through either their mobile phones or a bank account.  Indeed, it looks like the bitcoin paradigm shift in money transfer is ready to greatly increase its influence on the global mobile finance sector.
Wearable Technology

Just as mobile payments is becoming an accepted practice among consumers, now manufacturers are seeking to transform this process even more by enabling shoppers to pay with wearable technology. In recent years technology companies have been piloting and launching a wide range of innovative solutions that utilize multiple types of near field communication (NFC)-enabled form factors, including  rings, fobs and stickers, in addition to wristbands and smart watches, as vehicles for mobile payments.  At the same time, a handful of banks have chosen to participate in wearable tech trials, while others  who are already tweaking their mobile banking apps for smart watches.  While this is currently  considered a relatively niche market, the wearables domain still exceeded US$2 billion in 2015 and is expected to reach a staggering $34 billion by 2020, especially as the industry works through its current   issues, such as the installation of NFC-capable payment terminals, the available selection of NFC-enabled wearables, as well as increasing consumer comfort with wearable solutions. While some industry experts expect smartphones to always dominate the mobile payments process, some industry players    believe that by 2020 wearables will overtake smartphones as the vehicle of payment of choice.
Biometrics
With more and more people initializing digital transactions across more mobile channels than ever   before, the value of customer verification has significantly increased as regulators try to ensure mobile transactions are as secure and transparent as possible. However, the challenge is in finding the balance  between making the process as simple as possible for potential customers, not only for fickle millennials   who heavily use mobile devices, but for the unbanked that are usually considered BOP – bottom of the  economic pyramid as well, all while remaining compliant with ever growing regulations related to AML and KYC.
As we move towards 2017, that solution lies in biometrics, automated methods of recognizing customers through their biological characteristics and traits, such as iris/voice recognition, fingerprints  and finger vein patterns which are unique for every person and extremely difficult to counterfeit.
Utilizing biometrics for KYC management in banking and financial services enables customers to verify  their identity quickly and accurately, providing an easier and more efficient user experience, while at the same time, reducing security risks. In fact, the Biometrics Research Group projects that the implementation of new biometric technologies in the banking industry has the potential to cut a financial institution’s operational risks by at least 20% over the next 10 years as more financial   institutions consider how best to incorporate biometrics into their operations.
As we approach 2017, virtual currency (block chain technology), wearable tech and biometric  are all  innovative trends set to influence the world of mobile financial services, trends that signify the evolution  within the mobile financial service industry from a focus on functionality to one that seeks to place the  needs and expectations of the customer front and center. Indeed, the future of MFS lies in being truly digital. The future is now.