Technology is rapidly evolving the financial services, or FinServ, landscape. While technology initially disrupted the banking and FinServ industries with the rise of online banking, online trading and additional FinServ, its reach has expanded to include additional industries at a pace that few could have predicted even five years ago.
The effects of financial technology, or FinTech, are evidenced nearly everywhere — from how we manage our money, to how we make payments, to how we invest in even historically old-school industries like real estate, oil and gas. With so much going on in the sphere, it can be difficult to see what trends are taking the lead. Things get blurry when they’re moving that fast!
To help navigate the hurricane-like winds of change, here are three stand out trends we at the FinTech Professionals Association are glimpsing through the chaos:
1. Explosive growth
Last year, The Financial Brand predicted the adoption of FinTech was slated to double among digitally active consumers in 2016, and Business Insider reported that funding for global FinTech jumped from $19 billion total in 2015 to $15 billion by just mid-August 2016. FinTech growth is poised to increase at a rate of 54 percent through 2020. The train has left the station, and those onboard had better hold onto their hats!
2. U.S. playing catch-up
The U.S. is always seen as a tech hub, but the reality is that many other nations started mobile — rather than moving from desktop to mobile — allowing them to implement technology infrastructure on the ground floor that the U.S. is currently working to cobble together. In other words, their leapfrog over desktop directly to mobile sparked financial institutions across the globe to adopt technologies that make U.S. financial institutions appear to be moving at a glacial pace.
Buy something in Australia, or Japan, or China, and it becomes obvious how advanced their payment systems are when compared to our own. The good news is, we are catching up, and many of those proven technologies are on the verge of erupting on the scene in the States.
3. Adoption across industries
The demand for easy to use technology is spreading, and even the most historically archaic industries are jumping on the bandwagon. Energy, real estate, insurance and other industries that have a strong financial component are all experiencing their own FinTech revolutions, especially when it comes to capital formation. With companies like Goldman Sachs launching Marcus, FinTech has gone mainstream, giving other major financial institutions the ground cover to innovate.
While FinTech has made leaps and bounds, it’s important to remember that the industry is still in its early days. The way our children interact with their money will astound us. From micro embedded wearables to voice technology that lets you shop from your devices, friction will be removed and security will be enhanced in a way that is likely to make the Jetsons look more like the Flintstones to future generations.
Whatever the years ahead have in store, it’s certain to be a wild ride. So don’t blink. You might miss something — or, in the future of FinTech, maybe even accidentally make a payment!