The term “Fintech” has ubiquitously entered the arena of the financial industry and certainly looks as if it’s a term that is here to stay. While technology isn’t by any stretch something new to the financial industry, the “fintech” trend more accurately refers to disruptive technology that is changing the way we do things, from paying our bills, to issuing invoices and placing a trade. In this article we take a look at the trends which are showing the greatest promise, with forward thinking approaches that appear destined to break the status quo. Interestingly, all appear to be on a pattern that is headed towards the democratization of the financial industry, to the benefit of everyone.
1 ) Automation
According to Anmol Singh of Live Traders “The biggest trend this year will be towards automation”. Developments in automation refer not just to speed of execution, scanning software and trade management programs, but also into areas such as client conversion and retention, which had always been perceived as requiring human personnel. If taken to their full potential, these developments have the means to significantly cut resource and staffing costs, making the bottom line of financial companies far more profitable.
2) Collaboration and Synchronization
For Ed Kaim at Quantcha “The biggest trend will be an increase in the sophistication of the tools available for the everyday investor”. In the past, only the established professionals had access to custom software that gave them the means to execute specific transactions, however, now we are witnessing an explosion of tools that are designed to address a multitude of niches that have potential value to everyone and anyone. This growing interest is reflected as markets continue to embrace new Fintech concepts, coming forward as collaborations develop between traditional companies, financial institutions and Fintech challengers.
The financial industry is evolving so that it’s no longer in the interest of traditional personal advisors to service clients that do not qualify as “ultra-high-net-worth”, in its place, robo-advisers have come in to fill this void. Robo-advising, also known as artificial intelligence or algo trading is increasingly servicing a multitude of investors, who are looking to place small to moderately sized trades. Alex Conde of Questrade observed that people are increasingly embracing wealth management solutions like robo-advisors and in response companies are doing what they can to leverage technology, thereby smooth lining the process and making it even more convenient.
4) Rise of big data
Over the next few months many pundits are expecting to see a shift towards analytics platforms that are making data sets smarter and with actionable insights. While previously data in financial markets had been exclusively captive to proprietary platforms, especially in relation to decision support and alpha generating data, this trend now makes it possible for investors to become better informed and able to execute better investments. According to Tim Decker from Relate the News, it is a trend that is seeing a democratization of data that is now available to an increasingly diverse eco-system of financial market participants.
5) Blockchain Adoption
For a long time Blockchain had always been regarded for what it ostensibly is, a technology that moves “money” around in cyberspace. It’s only when real world events started to unfold such as regional regulation tightening, increasing currency volatility and political turbulence, that the potential in blockchain was realized with an identifiable service at the end of it. More than any other financial transaction service, Maxime Champoux from FXBIZ believes that Blockchain technology is a faster and more immediate cross border payment scheme, that will expand due to its ability to embrace the complexity found in the international banking network.”Get the 5 most predictable currency pairs