Wondering what the future of Fintech could look like? Look no further. According to the experts, the sector could experience these 4 trends and challenges.
An Introduction to Fintech
Fintech grew out of a lack of opportunity. The term became a movement for change, driven by social inclusivity and a drive towards disruption. By creating a space that generally responded to society’s unmet financial needs, Fintech began to challenge traditional and antiquated financial models. In fact, “emergent Fintech became a counterpoint to the establishment.” (1)
Case study
Property Moose, for example, offers an alternative route to climbing the property ladder. Investors can become landlords with just £10, without having to change a light bulb.
Traditional property investment, say for example, buy-to-let, requires having expert knowledge, a large sum of capital to begin with, and devoting time to maintenance.
We wanted to change that. Our platform provides individuals the opportunity to build diverse portfolios with the affordable entry point of just £10, allowing their funds to track UK property prices. You don’t need a mortgage, either.
Potential Fintech trends for 2017
Of course, these trends are not guaranteed, and they do not apply to all Fintech businesses. In addition, past trends do not indicate any future performance.
However, our research has shown that the sector could potentially experience some of the following changes.
Growth
2016 proved sceptics wrong, with the industry’s success proving it wasn’t merely a hype. The sector has genuine potential, and traditional financial institutions feel threatened by this. Our research shows that banks “know their customers are not only familiar with these alternatives, but find these new alternatives attractive.” (2) It’s likely that customers enjoy the availability of the alternatives, and the way in which the sector offers a unique potential solution to society’s needs.
Customer-focused
I believe that the customer will need to be at the forefront of Fintech in 2017. The sector should continue to provide opportunities through technology that are suitable for everyone, not just a highly specific stereotype. When we think that Fintech bloomed to provide opportunity, we understand the importance of maintaining this bespoke service.
The relationship between the customer and the service provider will be crucial. According to research, “when it comes to favourite brands, many anticipate a particular kind of relationship but are mostly content as long as the product works. However, customer scrutiny is different now to five years ago. Social media and 24-hour news cycles have seen to that.” (1)
Changing landscapes
2016 created an environment that is destined for change. Trump’s success and the Brexit vote laid the foundations for a huge shift in policies, and the current state of business and globalization are subject to alterations. However, “while certain countries may shift policy focus internally, global technology trends are counterbalancing this movement offering instantaneous transactions and communications from remote parts of the globe.” (3)
Opportunities
It’s important for both banks and Fintech firms to stay focused on the global marketplace. It’s likely that competition from Fintech firms will “continue to shrink available market share across every border with open Internet.” (3)
Something that might act as a genuine challenge before large banks is their decision to continue working in isolation, establish their strengths or achieve value in affiliating with Fintech platforms. “The opportunities are huge, and a partnership of this nature could create a new global payment system.” (4)
Written by Jenna Kamal
Sources
- https://www.starlingbank.com/wp-content/uploads/2016/09/starling_fin_tech_report_final.pdf
- http://bankinnovation.net/2016/08/the-fintech-threat-is-real/
- https://www.mx.com/moneysummit/4-fintech-trends-to-watch-in-2017
- https://www.finextra.com/blogposting/13100/how-banks-and-fintech-start-ups-can-work-together
Disclaimer and Legal
Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.
Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).
