(July 22, 2020) – Don’t you look now but the evolving fintech industry has got game for the challenges of modernizing the mostly antiquated ways of the financial world from processing of payments to back-end settlements. What’s more, its flexibility to innovate and create new instruments can make the once immovable incumbents flex their muscles to the freshness and breathable space fintech is offering.
However, there are four major trends that are poised to reshape, or shall we say strengthen, the present foundations of what fintech is all about, that without which, fintech companies may soon grind to a helpless halt.
The world ain’t ready for it yet, but quantum computers can be around in a few years’ time as IBM and Google are racing to produce a quantum computer. A classical computer uses bits while a quantum computer uses qubits. In theory, a single 100 qubits quantum computer is more powerful than all the classical computers of the world combined. It can exponentially improve on the computing power and speed fintech is boasting of today. It can create applications untold of that extend to healthcare, intergalactic travel, and even sentient AIs. Quantum computing is the master of solving uncertainties and is already set to defy the rules of physics and the sciences. The fintech industry will immensely benefit from it.
AI is the in thing and is fast taking over every industry which is relying heavily on manual operations. Fintech companies are inherently digital and it is but practical to be as robotic as possible for faster data processing, zero data error, low overhead expenses, and seamless user experience. It can be programmed to manage portfolio risks, adhere to complex regulations across borders, and works on a daily round-the-clock basis. AIs can interpret and recommend in real-time any market movement much to the favor of traders, investors, and consumers.
Decentralized finance is virtual financial applications based on blockchain protocols.
It is making the rounds in the financial ecosystem due to smart transactions such as peer-to-peer systems of payments, autobot loans, and cryptocurrencies (digital tokens), and stablecoins. The EURST stablecoin, for example, is pegged on the USD on a 1 to 1 dollar reserve to mitigate volatility risks, free from any controlling authority or censorship but transparent and secured at that, with daily auditing attestations. It is protected from fraud in that it applies anti-money laundering (AML) and Know-your-client (KYC) procedures. One prime example is Wallex Trust for digital and real asset management, and Wallex Custody, which allows for multi-currency accounts on fiat, crypto, or both. Being fintech makes Wallex facilitate transactions with very low fees, faster verifications, and a scalable infrastructure that allows for customizable designs according to client preference. DeFi also covers non-blockchain based services through the use of hardware and software packages which shifts back the control of personal finances back to the owner.
Big players such as Apple, Google, and Samsung each have their own payment rails to accommodate an enormously increasing smartphone usage among consumers and investors which is an indication of an impending cashless society. Even Facebook is developing its own stablecoin, Libra for its platform. A host of other big-tech firms are following the same course of action, which entrenched financial institutions aren’t taking it sitting down. They are all the more in the running for digital upgrades and innovations to keep their huge loyalty base happy and satisfied amid strong and growing competition intent on dislodging them from their lofty positions.
Fintech has turned from disruptor to luxury to convenience to necessity in this fast-paced world of transactions translating by the millions each day. Start-up entrepreneurs can do well by the relevancy of their ideas teeming with flexible systems to be able to adapt or disrupt for the good of the consuming public, that with its fickle preferences, are becoming really that hard to please.