Fintech has been around since the advent of the ATM and is exploding as customers choose mobile banking options on mobile devices over visiting a branch. From technologies like Amazon’s Alexa, which provides capabilities that enable customers to interact with and ask questions about their accounts, to blockchain technology which ensures digital ledgers can be programmed to record not just financial transactions but virtually everything of value, fintech has fundamentally changed the financial services industry, and our global economy.
In fact, Former CEO of Barclays, Anthony Jenkins, says banks could become irrelevant if they fail to keep up with fintech, suggesting that digital ledger solutions are saving companies between $80 billion and $100 billion a year by being able to settle and clear transactions near real-time. Such a revolution is taking place in fintech that Jenkins believes the financial services industry will experience a 50% decline in banks and staff over the next ten years.
Fintech has disrupted and reshaped commerce, payments, investment, asset management and even money itself with cryptocurrencies such as bitcoin. And Jenkins believes cryptocurrencies like bitcoin and artificial intelligence are just the beginning of a new transformation in banking. The banking system, using blockchain, will be transformed in a way that will eventually push banks out of existence.
In the more immediate future, fintech will become more pervasive in our lives, adds Kent Mackenzie, head of Deloitte’s fintech team in Edinburgh. “The growth of and development of technology is advancing at a quicker pace than it ever has done before, so it’s no wonder that new disruptive technologies are being considered in financial services,” he says.
The changes taking place within financial services will impact everyone with a wallet – from those doing business with banks to the employees themselves. “When you think of banks today, they’re really technology companies if you look at where they spend their money,” Eric Piscini, principal in the banking and technology practice at Deloitte said. In just a few short years, companies that provide fintech have defined the direction, shape, and pace of change across almost every financial services subsector. There is no doubt we have entered a new era of disruption in financial services with fintech setting the stage for growth.