• Scott Griest, Managing Director at Rapid Capital Funding


• 11.10.2016 08:45 am
Fintech

Fintech has already started to transform the banking, finance and transaction sectors rapidly. Fintech is well on its way to eventually capturing significant market share from conventional banking. In fact, the vast majority of fintech companies began serving banks as their customers. Now over the past few years, we are seeing more companies transitioning into serving niche products, clients and sales channels that banks are neglecting, resulting in their winning of significant market share. As the fintech industry continues to grow, so will the disruption it causes traditional banking and financials. Some of that disruption, is highlighted by these major trends that are forecasted to add convenience to our lives as consumers, and create an opportunity for those working in the banking and finance industries:

Blockchain will blossom way beyond bitcoin

Blockchain technology has the most potential to create massive disruption with its ability to store transaction data is a money saver, risk reducer and an optimizer of resources and procedures. Both private and public blockchains will be a pivot point for sharing and verifying data transactions across any device. The key to its growth will be the ability encrypt all of this data and enable users to manage the security of its data.

Simplification will drive entire companies

As more and more startups enter the fintech space offering similar services, the masters of the most simplified protocols for data storage, data retrieval processes and consumer interface will see success. Simplification ties together the intent of increasing business value and optimizing business costs. Investments in technology to simplify the process steps and information network will remain a key focus theme and keep the fintech market growing.

Cybersecurity will experience hyper-growth

As networks grow, the stakes have never been higher to keep fraud in check. Technology speed also makes the scale of damages created by data breaches incredibly high.  It's not surprising that cyber-security startups are easily raising funds since they appeal to clients in both traditional banks and fintech companies. Both sectors will see merit in engaging with specialist providers to get best-in-class solutions at optimized costs.

Machine learning and artificial intelligence will quickly evolve

We are already witnessing how default and bankruptcy prediction models by machine learning are creating immense value and impacting the bottom line of companies. In the future, tech-powered companies will leverage the platforms of the Internet of Things, mobile OS and cloud data storage to sync with advances in data records analytics of health care, road safety, etc., rendering insurance related decision-making lent to predictive analysis decision-models. Financial advisory, be it fund management, consulting, risk assessment or anything else, will also become cost optimized, readily available and standardized (free of human biases), when controlled by machine learning. We are already seeing that happening with startups such as FutureAdvisor. Also, machine learning will make luxury personalized solutions such as wealth management services (offered by a specialist advisory) as a mass product service – deliverable to every customer via robo-advisors.

Fintech will ride the consumer wave from the mobile-only generation

There are vast patches of the financial services ecosystem, ranging from small businesses to money remittance business models that are currently being not served adequately. There is also a portion of the consumer segment that has generally stayed away from banking investments but now carries a smartphone and will use it for any type of financial transaction. Needless to add, the millennial generation as consumers will propel the fintech segment.

Also, an equally important change we will see is the fact that ten years from now, any service that is not accessible online and from everywhere, will not be of interest to any client.