The emergence of financial technologies (popularised as FinTech) has been both exciting and frightening. In a report done by PwC in late 2017, 82% of queried financial institutions were expecting to lose revenue due to new FinTech.1 It’s a staggering number and shows the clear disruption that FinTech is making on businesses across the board. Yet, the other side to this disruption is an energetic drive to do better, as 77% of the queried financial institutions vowed that they saw it necessary to increase internal innovation.2
FinTech is certainly changing the way that people bank, save, invest, and even view money. With the introduction of artificial intelligence (AI) and blockchain technologies, the world has not only seen money managed differently, but it has even seen decentralised currencies like Bitcoin and Ethereum emerge. Despite our increasing awareness of this technology, some of the most disruptive FinTech has remained under the covers. Here are the three FinTech disruptions currently transforming traditional industries.
1. Mobile payments and consumer banking
Mobile banking apps are no longer considered new in 2019, but mobile and remote payment technologies are experiencing profound innovation . Consumer banks have already had to shift enormously with the introduction of FinTech apps,3 but in the future one should expect that they will have even more competition as mobile payment, investment, and saving apps become more commonplace, secure, and user-friendly. Alipay (the money transfer system that is contributed to much of eCommerce giant Alibaba’s success) is already taking China’s economy by storm, with its sights on a more rapid global expansion.4 WeChat has also seen rapid and mass adoption over much of east Asia with its money wallet and transfer functionality,5 and apps like Samsung Pay, or SnapScan in South Africa are transforming the financial sector6 It’s independent mobile payment options like these that one needs to watch out for, because consumer banking could look very different in the near future, begging the question: Will banks always be around?
Fingerprint readers and other biological data scanners for added security in general consumer products is becoming more common place. Have you noticed that, recently, you’ll struggle to find a cellphone that doesn’t have a biometric scanning capability? It’s crept into our day-to-day life, making us immune to recognising the incredible innovations that it has been bringing to life. Biometrics are creating more personalised security than ever before, often removing the need for passwords, PINs, or other more traditional authentications for your finance apps and technology. In a world where information is continually being leaked or hacked, it is this drive for premium security that has called biometrics to be adopted by FinTech.7 After all, it is much harder to steal a fingerprint than someone’s PIN. Beyond fingerprint biometric scanners used for security, a very exciting development, which sees lots of FinTech focusing on, is behavioural biometrics.8 Behavioural biometrics is the study of human movement,9 and is being used for technologies like pre-touch screens (screens that predict and action what a user wants to do before the user has even touched the screen, by analysing their movement, among other things).10 This could have a huge impact on FinTech – imagine a technology so uniquely in tune with you that you could bank, invest, or pay someone, without having to perform any real physical action?
3. Decentralised apps
Using blockchain as their foundation, decentralised apps are the new thing, even being referred to as “Dapps”.11 The story of decentralised apps started with the invention of blockchain technology, which Bitcoin brought into prominence. Blockchain technology is able to help create secure decentralised systems, as it uses cryptographic encryption techniques to break up sets of data randomly and store different parts of these data sets together, across a multitude of different “data blocks”.12 This data is readable as all blocks are linked together, but no one is able to have total control over it, as it is shared with the entire network – users have access and permissions, but no one has dictatorial authority.13 As Lauren Foye, a researcher at Juniper Research, explains; with apps now taking advantage of this blockchain technology, they are able to “pool resources across numerous machines globally, harnessing the power of thousands of idle computers. The results are applications which do not belong to a sole entity; but rather are community driven”, essentially meaning better and faster information delivered more securely.14 We could soon be seeing apps doing things previously thought impossible, as they begin to more closely mimic our brains, able to share insights and learnings with each other like never before.
Leading digital research experts like Juniper Research also expect in the near future to see quantum computers emerge.15 These computers work by using the charge or polarisation of particles, like electrons or ions, to represent the 0’s and 1’s of computer language. This allows the computers to work much faster, as at any time any particle is able to be a 0, a 1, or both, meaning that the computer can “talk” or “think” faster and better.16 These quantum computers will be able to do more than most of us have imagined possible, solving complex algorithms that can help redefine FinTech.17
Mobile payments, biometrics, decentralised apps, and even quantum computers are only the beginning of financial technologies that are secretly disrupting the world. It’s astounding to think that technologies we can be unaware of could do away with banks as we know it, make security as we know it null and void, and even create apps that share information like real communities. With the current rate of advancement, can you imagine what technology might be launched tomorrow?
- 1 (Dec, 2017). ‘PwC Global FinTech Report 2017’. Retrieved from PwC.
- 2 (Dec, 2017). ‘PwC Global FinTech Report 2017’. Retrieved from PwC.
- 3 Mearian, L. (Jul, 2018). ‘The top 3 disruptive FinTech technologies to watch in 2018’. Retrieved from Computer World.
- 4 Borison, R. (Jun, 2015). ‘Alibaba’s Alipay is winning the mobile payments game in China’. Retrieved from The Street.
- 5 (Aug, 2018). ‘Why Chinese mobile payment players are happy with slow U.S. mobile payment adoption’. Retrieved from Payments Journal.
- 6 Vermuelen, J. (Aug, 2018). ‘SnapScan positive in the face of strong competition…’. Retrieved from MyBroadband.
- 7 (Jan, 2019). ‘Year in review: the top applications for biometrics in 2018’. Retrieved from Find Biometrics.
- 8 (Jan, 2019). ‘Year in review: the top applications for biometrics in 2018’. Retrieved from Find Biometrics.
- 9 (Mar, 2015). ‘Behavioral biometrics’. Retrieved from Tech Target.
- 10 Owano, N. (May, 2016). ‘Microsoft Research exploring pre-touch sensing for mobile devices’. Retrieved from Tech Xplore.
- 11 Mearian, L. (Jul, 2018). ‘The top 3 disruptive FinTech technologies to watch in 2018’. Retrieved from Computer World.
- 12 (Sep, 2018). ‘What is cryptocurrency?’. Retrieved from Blockgeeks.
- 13 (Sep, 2018). ‘What is cryptocurrency?’. Retrieved from Blockgeeks.
- 14 (Jun, 2018). ‘3 Disruptive FinTech to watch in 2018’. Retrieved from Juniper Research.
- 15 Mearian, L. (Jul, 2018). ‘The top 3 disruptive FinTech technologies to watch in 2018’. Retrieved from Computer World.
- 16 Mearian, L. (Jul, 2018). ‘The top 3 disruptive FinTech technologies to watch in 2018’. Retrieved from Computer World.
- 17 (Jun, 2018). ‘3 Disruptive FinTech to watch in 2018’. Retrieved from Juniper Research.