Jun 19, 2018

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Identifying Opportunity in Emerging Trends in Fintech

Fintech is booming, with a rapidly increasing cohort of innovators developing new technologies to disrupt traditional financial solutions.

In such a dynamic space, where new solutions are hitting the market with growing frequency, it can be difficult to stay in the loop, let alone become an early adopter. We’ve barely had time to wrap our brains around Bitcoin, blockchain, and cryptocurrencies, and they’re already being leveraged to facilitate other fintech applications.

Let’s look at some of the emerging trends in the fintech sphere.

Web 3.0 (and Artificial Intelligence)

The advent of Web 3.0 will shift the paradigm of web interaction. Currently, the web gathers information for users based on keywords alone; by implementing artificial intelligence for search functions, Web 3.0 behaves more like an artificial intelligence assistant that gathers information to better understand a user, and delivers a personalised user experience.

Web 3.0 behaves more like an artificial intelligence assistant that gathers information to better understand a user, and delivers a personalised user experience

As the Web 3.0 transformation begins, Google will start making even more personalised recommendations based on your unique needs, and Apple will start to analyse your facial expressions over and above recognising your speech. Global tech giants are leveraging Artificial Intelligence and machine learning to make our lives easier, and their products indispensable.

Fintech is the next industry to board the Web 3.0 train, implementing Artificial Intelligence to establish algorithms to enhance trading, while a number of companies are using the technology to transform the way they deal with credit risk models, wealth management, insurance, lending, and fraud detection.

This new generation of the web is smart enough to understand the user’s context and provide personalised financial services with reduced human interaction. With digital wallets that learn their user’s habits and make personal finance recommendations, and automated financial advisors that assist users to make better financial decisions, artificial intelligence is being used across the fintech landscape.

Quantum Computing

Advances in quantum computing enable computers to assess and calculate exponentially larger amounts of data than what is currently possible with commercially available computer hardware. The expense of this burgeoning technology makes it inaccessible to most, but the tech giants are leading the way to implement quantum computing across a range of applications where large amounts of data analysis can disrupt the status quo – cryptography, simulations, machine learning, and algorithms, for a start.

Even though quantum computing is still in its relative infancy, the applications to financial services are already evident. JPMorgan Chase has partnered with IBM Research to investigate the ways that quantum systems can be applied to the financial industry, implying the technology “could provide exponentially more computing power for solving certain types of problems that require the use of complex algorithmic models to determine a likely outcome.” The adage “time is money” is true nowhere more than financial services – and quantum advances could provide the industry with the means to make better decisions at a faster pace.

Financial experts can expect to see quantum computing changing the industry’s approach to financial data modeling, complex algorithms for high-frequency trading, portfolio optimisation, and risk analysis.1

The technology is not without its risks, however. Rep. Will Hurd, chairman of the IT subcommittee in the US House of Representatives, explains that the same processing power of quantum computers that can be used for exciting innovations “can be used to unlock different kinds of secrets – from your personal financial or health records to corporate research projects and classified government intelligence.”2

High-security standards are a necessity throughout fintech, protecting sensitive personal data and financial collateral in financial institutions. As quantum computing brings new innovations to the table, it will have to bring new security measures as well.

Holographic Technology and Virtual Reality

Consumers and Finance Professionals may one day be able to use advances in holographic technology and virtual reality to immerse themselves in products and make better informed financial decisions.

While this innovation is still in the experimental phase, there are some applications to keep an eye on.

Citi has developed a prototype for a virtual trading desk, using the Microsoft HoloLens to change the way traders interact with huge amounts of stock data.

The winning team at the Las Vegas Money 20/20 Hackathon built a virtual reality mall, allowing consumers to browse and make purchases instantly, all within the virtual space.

MasterCard and Wearality have combined forces to test drive virtual reality payments. By identifying items within Priceless3, a virtual reality golf experience, users can purchase products without ever leaving the virtual world.

Multi-currency digital wallets

Digital wallet systems have provided consumers with a system to securely store their payment information and passwords for use across a number of payment methods and vendors. Using an e-wallet, users can complete purchases quickly and securely.

While digital wallet systems no longer qualify as new tech, the use of such systems to disrupt currency exchange systems is a more recent development.

Mobile app CashDash allows users to buy, collect and return unused foreign currency from the convenience of their mobile device – without the use of a credit card.

These applications provide consumers with a way to make their transactions both safer and easier, doing away with that bundle of foreign exchange in the back pocket, or a card that can be lost or pickpocketed. No more shopping around for the best rates or lowest commissions – digital wallet systems are set to make foreign exchange a breeze.

Biometric Payment Security

The rise in mobile payments require advances in transaction security. Mobile payment methods are not sustainable if they can’t be made secure against hacking and infrastructure vulnerabilities.

Biometric technology provides that extra layer of security. Advances like face recognition, iris detection, and fingerprint scanning provide consumers with a way to join the FinTech revolution without putting their finances at risk. Instead of memorising secure passwords for their digital payment systems, payments can be cleared using biometric security checks – like an iris scan from your smartphone.


While Bitcoin is the most well-known player in the cryptocurrency scene, it is by no means the only digital currency to watch. The decentralised network format of blockchain technology allows for encrypted, transparent exchange, and the increasing popularity of cryptocurrency has a ripple effect on business practice.

Initial Coin Offerings is one fintech trend changing the game for entrepreneurs. This system leverages cryptocurrency technology as an alternative form of crowdfunding, helping startups to source the funding they need to get their businesses off the ground.

How to identify and leverage fintech opportunities

Disruptive technology is, by definition, difficult to predict – it displaces established technology with ground-breaking innovation. Deloitte4 offers some key thoughts to help present and future start-ups to keep up with the changing industry:

  • Does the new service replace or augment an existing service? Is there a gap in the market, or does an existing service require improvement to meet an industry need?
  • Does the new technology improve its niche in the industry, or does it merely add bells and whistles that consumers and professionals don’t actually want?
  • What kind of structural or procedural changes are needed to support implementation of this tech?

By asking these three questions, and looking for out-of-the-box ways to meet an industry need, entrepreneurs and finance professionals can look for the trends in their earliest stages, and leverage innovation to augment their own business strategy.


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