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We’re past the point of contention between financial institutions and the fintech sector. Hysterical concerns that fintech would drive the conventional banking industry out of business have been mostly put aside, and that means that the industry is pushing full steam ahead into a world of technological innovation. Here’s how you can expect fintech to adapt in the months and years to come.

A Bold Approach to Security

If there’s one area where fintech stands to truly revolutionize the industry, it’s security. Financial organizations deal in some of the most sensitive customer information around, and that means that they don’t need to just keep up with technological trends. They need to be on the bleeding edge. That’s especially true as frontend apps and browser portals decentralize the banking process.

Traditional passwords are likely to become extinct in the next decade or so, replaced by biometric information like fingerprint analysis and facial recognition. As security advances, these companies can safely expand their banking operations by offering options like payments driven by virtual reality.

The Rise of APIs

Application programming interfaces (or APIs) are already the standard in a variety of industries. Cloud-based approaches that allow companies to pick and choose their software and have them work seamlessly together fundamentally changes the old standard of closed ecosystems. And those changes are likely going to have a major impact on the world of banking looking forward.

The lack of functional APIs for outside use among major banking institutions is a huge weakness, and it’s one that will have to change soon. But whether the predominant platform comes from a major bank with the resources to leverage or a small start-up with the agility and ingenuity to do so is still an open question.

Conflicts Over-Regulation

The future of fintech won’t be defined solely by industry innovations. Banking institutions are largely split over the need for regulation in the fintech industry, and that battle is unlikely to end anytime soon. Moves are already being made to allow fintech companies to provide a full suite of banking services in exchange for being compliant to the stricter regulations that banking institutions have to deal with.

That means that traditional banks could see a flood of competition in the form of digital-only operations that can undercut costs by doing away with brick and mortar operations. But the path to proper industry regulation is bound to be a long and bumpy road. That could signify a world where we see more partnerships with banks and fintechs, with each building off the other’s strengths and shoring up their weaknesses.