Fintech moves rapidly, both shaking up and streamlining financial services as it goes. At its core it's disruptive, but positively so. Having expanded explosively, fintech now means the incorporation of technology at every layer, from the corporate backroom to the customer's handheld device.
In practice, this often contains as its ideal the notion of democratization. Think of peer-to-peer lending, or stock trading on a mobile app, with no fees.
And fintech is wrapped up closely with innovations in AI and Machine Learning. Increasingly, fintech applications will improve through experience, augment themselves, and ultimately become capable of ever greater levels of autonomous behavior.
With all this in mind, what predictions can we make for the upcoming fintech future?
Movement away from cash
Digital, mobile, contactless, cashless, you're no doubt familiar with the terms for the various payment methods that have one thing in common: they don't use physical cash. While it may be true that pandemic measures gave a push to this trend, the reality is that we were already moving in that direction anyway.
Such changes benefit the organizations that utilize them, and it turns out that customers like the new methods too. You could call it a win-win. Expect to see further adoption of digital payment integration, and be prepared to see it taken up across the board, from small traders, to the biggest corporations.
It won't be long until there is widespread customer expectation that a business should have cashless tech enabled as standard.
Retirement options diversified
There have always been plenty of people looking for alternative ways to finance their retirement years, through options such as taking out a reverse mortgage, or funding a brokerage account.
Increasingly, though, more people of all ages are open to innovative, unorthodox financial solutions. As a retirement boom approaches, the timing is perfect for an expanding, buoyant fintech movement to rush in and get to work.
This is a nascent arena, as pension planning has not previously been on the fintech radar. With pensions traditionally a conservative sector, it remains to be seen exactly what technological disruptions will emerge, but expect an emphasis on greater control and flexibility, and, as with everything fintech, streamlining and assistive automation.
A phrase you might not have heard if you don't follow the most dedicated bitcoin enthusiasts, is hyperbitcoinization. This refers to a proposed inflection point, at which we adopt something like a global bitcoin standard, by which the blockchain asset becomes a worldwide value system.
To anyone not involved with bitcoin or the crypto space, that sounds wildly fantastic, but even if you remain unconvinced by the concept, there's no doubt that bitcoin has now made itself more firmly established than ever before.
2021 has seen major corporations increasing their investment in the digital asset (and potential currency), the price has rocketed, again, and one country, El Salvador, has adopted bitcoin as legal tender.
Additionally, when bitcoin rises, the other boats (that is, other cryptocurrencies) rise too. Just as programmers use different programming languages for different tasks, different cryptos are being used for different purposes, from decentralized finance to digital art.
Fintech insurance options
If banking, retirement, and payments can be powered forward in new ways by fintech, then it stands to reason that insurance can too. Similar changes are already taking place, as the insurance sector catches up with innovation elsewhere.
When customers get used to the tech-enhanced version of banking and payments, then they come to have similar expectations for other services too. This means having insurance services that are digital, flexible, and mobile-first.
There'll be an improved customer experience, and greater personalization of products and services. AI, as it gains in power and elegance, will take a guidance role, and assist in decision making and policy management.
Furthermore, as digitization gathers pace, more products will be targeted specifically at younger demographics, who are less interested in insurance, but are significantly more open to and persuaded by digital services.
Already emerging in Asia, merged applications, or super apps, are likely to develop globally. What this means is innovators creating apps of all apps. That is, a bringing together of all the different technologies into one place.
The key concepts here are simplicity and ease-of-use. No-one wants to keep track of sign-up after sign-up, or feel like their financial affairs are scattered across the internet. The solution to messy tech, is clean tech, and what could be cleaner than having everything loaded up together?
It would feel streamlined and manageable to open up a digital, mobile wallet, and have your banking, payment methods, investments, active trades, crypto exchange, social media, and anything else you might need. All of it would be easily accessible and interconnected.
These kinds of developments are already occurring. Importantly, change evolves into further change, bringing previously unexpected new products and services. The potential is there for rapid progress.