The Fintech Revolution: The Future of Banking Is Here
Here at V2, we know that it’s often the tech advancements and innovations applied to everyday things that have the largest impact on our lives—and fintech certainly fits that category. Think of what it was like to split the bill before Venmo, manage online payments before PayPal or pull your credit score before Credit Karma. The horror!
We’re not the only ones who see the potential for real disruption in financial services: funding for fintech startups has grown from $3.6 billion in 2015 to $39.57 billion in 2018, an increase of nearly 1,000%, and six new unicorns were born in Q3 2019 alone.
Fintech goes far beyond the basics, such as eliminating the need to write a physical check. Companies in the industry range from lenders automating the loan approval process and equity financing companies making it easier for businesses to raise money to personal finance and consumer banking companies that make managing your money, well, manageable.
In addition to creating efficiencies and cost-saving opportunities for consumers and businesses alike, fintech democratizes participation in our financial system: it has never been easier to find reliable advice at a low cost, get approved for a loan with nontraditional credit or dabble in investing.
As we head into 2020, here are some of the biggest trends the experts are expecting to see:
AI and machine learning will continue to dominate
From using robotic process automation to revolutionize basic financial administrative tasks and AI-enabled chatbots for customer service to utilizing machine learning to assess risk and identify cybercrimes, AI will continue to grow as an important influence on fintech. (For more about AI, check out our AI Disruptors infographic)
The industry will start to consolidate
2020 may bring consolidation and new partnerships to the industry on several fronts: partnerships between traditional banks and the startups developing the tech and innovations those banks need to survive; partnerships between complementary fintech startups themselves; and M&A that crosses industry lines.
“As fintech companies mature and expand, industry leaders will continue to acquire crucial proprietary tech companies, blurring industry lines and cutting their costs in the process,” Joe Camberato of National Business Capital & Services told Forbes. “Be prepared to see competitors in your space start to purchase and/or merge with marketing, big data and other non-fintech software companies to drive customer acquisition and retention.”
Tech isn’t just for money—it’s for regulation, too
“Regulation is everywhere in the financial services industry and it’s one of the largest business overhead expenses,” Jeffrey Burg of Dobrusin Burg told Forbes. “Many regulation compliance tasks are still completed manually or with human oversight. Expect more regulation technology solutions to come to market with a goal of streamlining processes and reducing costs.”
In our newest Disruptor Series infographic, we take a look at the trends and companies changing the face of finance as we know it. Check it out here.
December 3, 2019Author
By Jenna GilliganCategory