Fintech is rocketing. With investments in the sector quadrupling from $3 billion in 2013 to $12 billion in 2014, all signs indicate this growth continued throughout 2015 and that growth is accelerating. As consumers we see some signs of this, but there is much more behind the scenes - things that will change the entire financial sector.
Digital finance services can be divided into 5 categories:
- Online and mobile access
- Mobile payments and money
- Digital currencies and transactions
- Digital finance infrastructure
- Digital finance instruments.
The first one is the most traditional category: access to web banking services or online trading tools. We’re still in waiting mode with mobile payments: Apple Pay is getting more users and players like Google and Samsung are becoming active. But progress is slow and consumers ask: “why should I use my mobile for payments if I can use my contactless credit or debit card, which I need to carry anyway?”
Vision 2016 Supplement
Cryptocurrencies and financial infrastructure
Digital currencies, especially bitcoin, are receiving attention and also acceptance, as some regulators have begun to treat them as a commodity. But they are still new and not for mainstream users. Now there are signs the transaction and data model behind bitcoin, blockchain, is more important than bitcoin itself. Blockchain is not tied to bitcoin, so it (or similar models) could be used to record all kinds of digital ownerships and transactions. Its decentralized model can even challenge the role of banks in many financial services. And it can offer a new way to handle digital investing and lending services, as well as different kinds of digital agreement processing and deposit servicing.
Digital financial infrastructure includes many components and has the most impact on the entire financial sector value chain. This infrastructure includes online investing, equity crowd-funding, and P2P lending services. The SEC recently ruled that basically anyone can invest in equity crowd-funding in the US, while the UK is the fastest growing market in these services.
Digital back offices (with user registrations and accounts) user background checks, payment solutions, and other needed components with open APIs make it easy to develop these kinds of services. Data aggregation and analytics services help investors and enable new value-added services. Wealth and portfolio management services bring a new service layer to their users.