It’s a Fintech World: The 3 Biggest 2016 Fintech Game Changers
In 2015, we saw how quickly the banking industry can consolidate and innovate. There was significant progress in mobile payments, customer engagement and blockchain technology. We also saw more digitization and the beginning of a new virtual customer experience.
In 2016, the fintech world is predicted to have some amazing breakthroughs and the digitization of financial services is expected to increase with the use of mobile apps and data analytics to enhance customer engagement. There will be a seamless digital delivery with heightened cyber security as exciting trends in cryptocurrency continue. Most importantly, platformization (PLM) of the banking industry is imperative.
This year’s projections take us to a “brave new world” in fintech. Here are the top 3 game changers for 2016.
1. Platformization / Digitalization
Ron Shevlin, Director of Research for Cornerstone Advisers is the author of “Smarter Bank: Why Money Management is More Important Than Money Movement to Banks and Credit Unions.” In his book he describes the emerging technological disruptions and how they will impact banking.
Shevlin believes that both existing banks and new startups will shift to PLM, where they will become banking platforms, “much like how Amazon is a platform in retail.”
PLM is most certainly a trend that will change the physical reality of banking. Have you ever thought of your local bank as an online business platform? PLM is the innovative disruptive technology that is changing the nature of banking. Digitalization of financial services is becoming the new business model for the 21st century.
Fintech is being turned upside down by the challenge. In the future, every sustainable enterprise (including your local bank) is going to need an online interactive, customer service, digital platform, in order to do business. All areas of the fintech industry are quickly developing new revenue producing and value-added opportunities online.
2. Fintech Cyber Security
2015 was the year when many organizations and even government entities were surprised to discover how truly vulnerable they were. Cyber attacks, hacking scandals, and porous firewalls were in the headlines.
This year cyber security will continue to be a major issue for all banks. As our technical expertise grows, and our digital platforms expand, more sophisticated cyber security is needed to bridge the gaps.
Innovations and challenges primarily leverage third-party service providers. It’s vital that real-world policy and protections continue to feature tighter methods to encrypt sensitive data and smarter multi-step authentication processes.
Financial institutions rely heavily on information systems transmitted online. With most transactions going mobile, cyber security continues to be one of the top priorities in fintech.
Cyber threats are here to stay. A combination of technological evolution and security regulations are the only way to defeat them. The stability of banks keeps the global economy stable. The right cybersecurity holds it all together.
The continuing evolution of these threats has been recognized by regulatory bodies, which set security requirements to meet them. The combination of external regulation and internal procedures set by financial institutions, make cyber security requirements an area of outstanding technological innovation.
Cryptocurrency is the alternative digital currency of the new millennium. In 2009, Bitcoin was developed. It was the first in a new breed of decentralized cryptocurrency. Since that time, this virtual currency has continued to develop.
Cryptocurrency was originally designed to be the money exchange for Millennials. Since a central authority does not issue cryptocurrency, it has built-in cybersecurity and is in theory, safe from outside manipulation.
In 2016, we expect to see cryptocurrency becoming easier to use and less complicated. At any rate, there are over six hundred and sixty nine types of cryptocurrency, currently in use in online markets. Cryptocurrency is here to stay and continues to evolve as currency.
Fintech Game Changers: Conclusion
The banking industry is a culture of innovation. Major shifts in customer expectations, competition and both internal and external regulations are continual disruptions.
Millennials lives are increasingly focused on the instant gratification of our mobile society. In response, fintech is rolling out a variety of new PLMs in a super cybersecure environment. At the same time, this generation of banks and fintech innovators are riding the perfect technology wave in 2016.
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