13 Mar Blink and you miss it – what are the top trends in FinTech right now?
By Gavin Lock, COO, Senjō Group
This week we’ll be attending Money 20/20, the leading global Fintech conference that has now launched its Asia chapter right here in Singapore. 2018 has already been a staggering year in terms of the new trends, technologies and developments out in the market, driven almost entirely by the FinTech ecosystem. And a lot of these are happening most quickly in Asia, making the timing and location of Money 20/20 a very exciting proposition.
Here are just some of the main themes that are continuing to play out in a big way this year, and we expect to see front and centre of the agenda and be at the heart to the conversations we have with Fintech businesses onsite at the conference:
Payments – when people think of fintech & innovation, payments doesn’t always strike them as the hot-bed of rapid innovation, entrepreneurship or change. Often viewed as a binary, mundane aspect of people’s financial day-to-day activity, it’s in fact at the forefront of new frontiers and transformation in finance. Given the constant flow of data and real money from customers, the payments sector is well positioned to be a testing ground for new technologies and its where you see some of the more exciting new ideas come to fruition.
Financial inclusion – on a related point, how you reach the underbanked has been on the minds of NGOs and economists alike, and is now on the minds of technologists. Technology can be an enabler and reach millions of new customers with products that can have a truly life changing effect. The World Bank estimates that 2 billion people don’t use formal financial services and more than 50% of adults in the poorest households are unbanked. Financial inclusion is a key in reducing poverty and boosting prosperity – and technology and innovation is making this possible.
Distributed ledger technology & blockchain – the technology underpinning bitcoin, ethereum and so on has applications across a massive range of different sectors, uses and industries. From trade finance to anti money laundering, this is one area that will continue to grow and around the world, and governments in particular are taking it seriously. Across Asia, while some governments are sceptical of cryptocurrencies, many see value in the underlying technology and are making positive noises about regulation.
Open platforms – technology has allowed us to share information much more securely and conveniently, and when it comes to banking this means that products, services and other more nuanced offerings like financial advice can be much more easily adapted for the customer. This is all possible through the opening-up of application programming interface (APIs). And there’s been significant shift in this recently as banks move away from treating each other and start-ups with suspicion, to embracing new developments with open arms, collaboratively. Open banking is where we’re moving towards. Firms that are tech-savvy will be the ones that benefit the most.
AI – another key buzzword in FinTech right now, Artificial Intelligence is expected to explode exponentially – McKinsey & Company calculated that tech giants Baidu and Google spent as much as $20 billion and $30 billion on AI in 2016. It can reduce processing times, cut resourcing costs, improve security and reduce human error. Like pretty much every industry out there, automation is only inevitable. It allows smaller companies to compete more efficiently and can drive fascinating insights to businesses looking to improve their offering.
Alternative lending – traditional lending markets have been under threat for some time from new providers that give greater access to quick, easy and stable financing. This includes Peer-to-Peer platforms, institutional investors and eCommerce giants like Amazon. Banks have also been rethinking their approach to this, and have been financing start-ups (like Goldman Sachs’ “Marcus” lending platform) and largely reconfiguring their approach to lending. Regulators around the world are now paying more attention and we expect this sector to continue to grow.
Disintermediation moving towards partnerships – a few years ago, the banks were scared. Ecommerce platforms, tech start-ups and investors are working out where they could readily disintermediate their traditional businesses. However, while this threat still exists, partnerships seems to be the trend that’s most in vogue. We expect to see more banks, global tech and ECommerce firms, start-ups and investment businesses work together to achieve a better functioning financial services ecosystem.
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