10 Innovations in Fintech

10 Innovations in Fintech

As identity theft continues to cost banks at least $1 billion per year, secure yet adaptable bank services are severely needed by customers. Luckily, 100 of the U.K.’s brightest minds within the Fintech, or financial technology, sector gathered on October 28, 2014 to create a hub of innovations to build the bank of 2020.

Members from Financial News’ 40 Leaders in Fintech who attended the gathering were broken up randomly into groups, each focusing on an aspect of the future of banking.

For examples, they focused on regulatory requirements, security issues, adaptability to rapidly changing customer demands, or big data conundrums.


  1. The Firm will revolve around the Customer

The customer’s choices will be the center of the universe, and their options will be aplenty. For example, as one develops their savings, they have the instantaneous and personal choice of whether to delegate their money management to any provider of their choice, or even manage it themselves. Each person would have a portfolio with their personalized preferences that auto update to set criteria. If one invests only in environmentally sustainable business, then the program will only make those choices.

  1. Mobile Phones will be more powerful than ever

Everything you needed from your local branch, in terms of investment opportunities will now be provided on an instantaneous and ongoing basis on your mobile device.

  1. Robot financial advisers are a click away

There will be no worry in the future about unsound financial choices, because if you purchase too many shares in a company, a program called the Know Your Customer and Suitability Tool will automatically prevent you from doing so. It will tell you what you’re trading off in terms of future pension plan or college education savings.

  1. Algorithmic functions will monitor your banks behavior

Like a child, your bank will constantly be under the microscope to quickly analyze mass sums of data, and use it to identify external and insider security threats.

  1. Banks could become identity brokers

With all of the information they process and analyze on a daily basis, they could use the information they learn about their clients that give insight to other customers or vendors. It could be applied to creditors determining worthiness, or start-up ventures needing market data.

  1. Banks will be replaced by technology

Algorithms will work together under a platform that is user-friendly. Thus, banks will become just like a technology company that is the middle-man of information about customers, products, and markets.

  1. Bank-agnosticism will be a term

Your bank account will simply live in an open ecosystem where you can manage all of your current and future financial needs. This means that you will own your account, and can easily move it from one bank to another. Like a cell phone number, the account would represent your identity, and you will be able to keep it regardless of who is providing the service. This will gratefully allow small banks to more easily compete against the massive banks.

  1. Blockchain Technology

This technology that is currently being used in Bitcoin, refers to a sequential transaction database that creates a validation technique for cryptocurrencies such as Bitcoin. Blockchain use would spread wide and fast to distribute, verify and record a wide-range of financial services, making the financial system more decentralized. While some risks would be eliminated, the banks know it is not a perfect solution, as other risks are introduced.

Michael Nielsen explains in his article How Bitcoin actually works what these risks include,

“For [the blockchain] to have any chance of succeeding, network users need an incentive to help validate transactions. Without such an incentive, they have no reason to expend caluable computational power, merely to help validate other people’s transactions. And if network users are not willing to expend that power, then the whole system won’t work. The solution to this problem is to reward people who help validate transactions.”

  1. Social Trading

No one saw this one coming. Lending, borrowing, and trading on social network platforms will be a norm

    10.  Decentralization

The traditional middleman will be cut out of the bank’s work. Crowdsourced loans, mortgages, and risk management products will be available for the public. The institutional investors will directly provide funds to consumers or businesses through online platforms.


Welcome The Bank of 2020

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