How innovation will continue to impact the fintech industry

Few areas in the industrial and business world have been affected as much by software and technology than the financial industry

2Aug

Like so many other aspects of business and technology, going into the rest of the 21st Century, fintech will undergo changes driven by innovation and engineering. Here are some of the many mediums that are approaching on the horizon:

The rise of cryptocurrency

The prominence of cryptocurrency and ICO (Initial Coin Offerings) will continue to increase. All we have to do is look at the track record. In 2017, the value of Bitcoin reached a total of $15,000. Although fluctuations do exist, cryptocurrency is taking the world by storm because they are usually paired with initial coin offerings, thus opening up a whole new world for many companies that simply would not exist otherwise. Offering ICOs gives fintech companies the ability to get around the ordinary regulations, thereby speeding up the process of a normal initial public offering. For example, the ethereum cryptocurrency, which raised $18m in 2014, is currently priced near $200. Indeed, the total money raised by cryptocurrency currently stands at $87bn dollars. New ICOs will continue to be developed on a constant basis.

An increase in the “sharing economy”

Fintech companies need to realize the “sharing economy” will continue to increase and is likely to expand into financial services.

Although the sharing economy might have begun with Uber, hotel rooms, vacation spots, and other similar things, very soon it is going to expand to financial services. In other words, people will use banking services, but they may not look at a traditional financial institution to do it. Brick-and-mortar loan institutions just might be on their way out.

Digital will now become mainstream.

Two decades ago, large financial institutions established “e-business” platforms in order to expand their business. It seems now that the “e” has totally disappeared and this is just business as usual. Fintech companies can now apply this to payments, retail services, wealth management and now capital and commercial banking as well.


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Customer intelligent business

“Customer intelligence” is soon to become the new buzzword for fintech companies who want to ensure revenue growth and profitability.

Customer intelligence is all about knowing what your customers value. You have to be certain that you know 100% what it is your customers want. Previously, customer intelligence was based on some relatively simple criteria: companies would construct focus groups and device surveys. Although the data did help, it had mixed results. In this day and age, new technology advances help businesses be able to mine a humongous amount of data about what users want and what they value. Basically, if you know how to use analytics, companies will be looking for you to help give them an upper hand in catering to their clientele.

AI use in fintech will become the rule, and not just the exception.

AI technology is going to continue taking the fintech industry by storm in the years to come. One example is in tax preparation. Instead of just the normal function where professionals prepare for tax season, there will be AI assistance that can aid accountants and clients do their taxes right away, taking out all of the guesswork. AI and robotics will start a wave of localization. This means that robots are already starting to be able to sense their environments and provide safe and useful behaviors to consumers. You can expect some major gains in the next decade in the field of AI and robotics especially in the tax and accounting work.

We are living in a world where the possibilities in the financial services industry are literally endless. This is the dawn of a new age for everyone involved.

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