The financial technologies sector is seeing change on a massive scale thanks to numerous innovations in recent years. Peter Drucker once said that the best way to predict the future was to create it yourself. That is the approach that banks and fintech are taking today.
These are the current fintech trends that you’ll want to watch right now.
1. Rebundling Services
Banks moved to unbundle their services as a way to customize their services. This action took one complete offer and turned it into several separate options. Instead of offering niche solutions, the fintech sector allows for a shift toward rebundling to become service providers, marketplaces, and platforms for even non-financial services.
Companies in the fintech sector are finding numerous opportunities abroad. U.S. firms are going to Europe, while Europeans are seeing North America as a fruitful market for their services. There is an increasing number of firms in this industry who are finding ways to globalize.
Cryptocurrency tends to be the primary point of focus for blockchain technologies, but the fintech industry has other plans. The information that it can provide offers transparency without the need for a centralized organization. Those who find innovative ways to include this option will see higher levels of scalability.
4. PSD2 Changes
There is a massive push toward open banking in Europe. The impact of the PSD2 directive from the European Union will have a trickle-down effect on the rest of the global industry. There will be a battle for customers as banks create platforms that eventually lead to the desired ecosystems that everyone wants in the future.
5. Regulatory Changes
Countries like South Korea and China are looking at cryptocurrency and ICOs as potential regulatory problems. Some nations are more receptive to what these opportunities offer. Unless there is a push for a borderless world in the coming years, each legislative body will have its own say through regulatory frameworks on how the fintech sector can shape future markets.
6. Financial Inclusion
The primary tool of financial inclusion today is the mobile phone. As the fintech sector continues to grow in the banking industry, being a customer of this industry will determine who is outside of the local financial system. There will be a push to bring in more people away from the cash sector as the benefits of automation, online payments, and blockchain transactions continue to mount.
7. New Strategies
Fintech startups are working with banks to create digital assistants and automated advisors that create opportunities for internal disruption. This approach creates a new strategy where consumers will work with AI more often for most of their banking needs.
The fintech industry is poised to see a tremendous amount of change in the next decade. New approaches and technologies could change almost every way we approach transactions as consumers. These trends will create numerous opportunities for new leaders to emerge, but it will only happen for those who are willing to put in the work now.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.