Changes take time, until they just happen. Financial services are at the cusp of a remarkable change that few bankers realize. The decentralization of technology, new regulation increasing competitiveness and ecosystem strategies - all these trends will mark the rise of a new era of financial services. This era will be fundamental to end user value, and those who provide it, will thrive.
Waves of Fintech Transformation
New applications that sit at a legal gray area for financing innovative companies. Excited investors pouring in millions and millions of capital. Regulators and policy makers trying to understand the new models and introduce investor safeguards as well as industry guidelines. Financial institutions watching by the sidelines, evaluating what their next move will be and how to respond. The year is 2010 and everyone is excited about the prospect of crowdfunding.
Tokenization has become a key trend with digital currencies and cryptostrategies in financial services. Tokens seem to be raising hundreds of millions in real time left and right. For an existing financial services firm, should you look at a token strategy and if so, how should you look at it?
Artificial intelligence (AI) and machine learning (ML) are becoming an infallible part of the development of present-day technology. Yet the public discussion often centers around a notion of a ‘human-like’ robot and my concern is that the impact gets downplayed. How then should we look at the future with AI? One way which may be helpful is examining the aspect of morality and consciousness, or rather, the lack of both in decision-making in a new paradigm.
"A decade ago we had the first big leap, and that was web to mobile,[…] Now the next one is mobile to conversational” said Edrizio de la Cruz, co-founder and CEO of Regalii, a startup whose application programming interfaces are used by dozens of financial services providers to build their chatbots.
Banks Will Soon Be Unrecognizable
In between pauses at the WWDC, Apple announced it will be expanding their financial services strategy by going beyond Apple Pay and issuing virtual payment cards to all iOS users. There are 1bn iOS users around the world. At the same time, this same week Amazon made headlines by having lent over $1bn to third party sellers on the Amazon marketplace. Amazon has also rolled out a highly aggressive credit card offer with Chase, which offers 5 per cent cash back for its Prime customers. Neither company is a traditional financial services company. So what is going on?
As the senators in the United States Congress maneuver a health care bill of massive significance for the insurance industry, let’s a take a closer look at the wave of disruption that has firmly placed the insurance industry and Insurtech in the spotlight of the cross industry technological wave borne out of the great recession.
Working in Fintech since 2008, I’ve seen many models emerge and be reimagined. Standardization and cost efficiency have been led by technological improvements. Stages around the world from Toronto to Paris to Singapore have showcased how finance is changing and evolving through the embrace of Fintech. This has been a global phenomenon since the very start, yet its development is not linear and the spearhead varies from region to region.
Fintech adoption is growing rapidly all over the world, but it’s in the emerging countries that it’s increasing at the fastest rate. According to a report just released by Ernst & Young, the EY FinTech Adoption Index 2017, where the consultancy firm surveyed more than 22,000 people from 20 different markets, the Chinese market is the one with the highest Fintech adoption rate, with 69% of the respondents saying that they were regularly using Fintech services.
Private transactions have since long been conducted directly between the transacting parties – for example, the investor and a private company. This process has largely been manual and cumbersome, and a large amount of diligence has had to occur in order for the parties to trust one another enough to undertake the deal. We’re seeing part of this transaction be made much more efficient by the transition to process trust.