Innovative Change: The Future of Finance and Fintech

7 min readJun 9, 2020


New technologies are displacing various aspects of traditional finance, from making payments to saving, to trading. Innovative ways of financing are giving way to automated, IoT- and AI-enabled decentralised services from fintech startups. Many innovative mobile financial services are taking the market by storm, driving millions to the formal financial system.

First, we’ll review what the future could entail for the finance industry:

Digital Economy — Statistics

According to the Bureau of Economic Analysis (BEA. 2018), the digital economy accounted for 6.9 per cent ($1,351.3 billion) of current-dollar gross domestic product (GDP) in 2017, up from 5.9 per cent in 1997.

The fast-evolving decentralised ecosystems offer tremendous opportunities to support sustainable economic development. It may replace the existing platform-based financial business structures.

Blockchain technology and digital currencies are growing far more prominent and harnessing the potential of big data analytics for expanding the boundaries of financial inclusion.

It can also expand microfinance, including credit, savings, insurance, and other financial services. It also includes nonbank financial service providers such as peer-to-peer lenders and crowdfunding.

Customised Technology-Focused Investments

With big and small players operating, the technology sector includes stocks involved with research, creation and distribution of technology-based services and goods.

Technology stocks offer investors a lot of opportunities. The sector provided the highest returns of all ranked market sectors at 34.28% in 2017 (Motley Fool. 2019).

With this growing sector, investors can invest in stocks across various segments of the technology market, including AI, smartphones, the Internet of Things (IoT), cybersecurity, and chip developers.

Apple is a prime example of a company that has development stock opportunities for their investors over the last 20 years. The primary driver of this success is that Apple creates products that failed to exist previously and revolutionise existing markets.

For example, when the iPod launched in 2001, Apple saw a 6.6% share increase(Investopedia. 2020) within seven days. Then, in 2007, the iPhone gave Apple stock a 15.9% increase within one month (Investopedia. 2020). With their innovative thinking and investment in powerful technology, Apple has commanded great success across the mobile, tablet, laptop, and digital markets, offering investors more opportunities to make customised investments in technology.

AI-Based Decision Making Enhancement Tools

Many institutions and asset managers have already begun integrating AI into their decision-making processes. They believe that AI technology will significantly improve decision-making by removing human biases and providing new analytical insights.

According to a recent survey (Fidelity Investments. 2020), over two-thirds of investors believe that they would be relying on AI for evaluating portfolio performance and risk by 2025. Forty-seven per cent think they will use AI to time their investments.

Robo-advisors use computer algorithms to make complex decisions and provide a range of benefits to investors including:

  • Lower fees and minimums compared to human advisors.
  • Automated rebalancing of portfolios to preferred asset allocation.
  • Matching market returns on their benchmarks.

Companies such as Betterment and Wealthfront offer affordable robo-advisory services to customers from diverse backgrounds, with fees starting at 0.25%(Finextra. 2019) and minimal entry limits.

Digital Currencies/Tokenisation

Digital currency is the future of money. Thousands of people are already using cryptocurrencies via digital wallets. Central banks (Ethereum World News. 2020) such as the Federal Reserve are soon to issue their own digital currencies. Once all of these currencies reach the market, the dollar might face real competition as the world’s dominant currency.

A recent example of this is the Calibra currency, designed as a stable coin-backed currency basket that maintains a permanent value and provides access to financial services without requiring traditional intermediaries.

Recent updates to Calibra, known as Libra 2.0 (JDSupra. 2020) focus on establishing a more traditional payment network that will allow the use of everal cryptocurrencies linked to fiat currencies like euros and dollars, instead of a sole digital currency.

Automated Investments Via Smart Applications

Investing will become more accessible, thanks to smart applications. With automated investing, everything from trading decisions and portfolio management to auto-rebalancing will be done automatically. Investments will be monitored daily and automatically rebalanced, keeping you on track. Robo-advisors will create your diversified portfolio of handpicked ETFs.


Neobanks such as ‘Revolut’ and ‘Transferwise’ provide a modern interpretation of banking services that rely solely on online transactions. These digital-only financial institutions offer a range of financial services accessible exclusively via smartphone, tablet, or desktop.

Therefore, instead of investing in physical branches, these companies spend funds on robust online services such as advanced fraud detection systems, AI-powered risk assessment tools, user-friendly interfaces, and chatbot technology.

This shift in the banking paradigm came about towards the end of the 2008 recession. As traditional banks tried to recoup massive losses, they were unable to lend large amounts of money. In the UK, the government amended regulations, allowing neo-banks to raise capital and develop online infrastructures before obtaining a full banking-license.

This change in legalities led to a surge in startup activity, enabling disrupters such as Revolut and Transferwise to start competing with traditional banks. Today, neo-banks face the same level of regulation as traditional banks and are becoming a popular business model across the US and China ( 2020).

Revolut’s success stemmed from initial strategic funding and crowdfunding campaigns that eventually saw the company valued at £1.2b, providing a return of 19x (Crowdcube. 2019) for original Crowdcube investors.

In the next decade, experts expect this sector to expand and retain a higher percentage of the global financial market.


We also see an evolution in the Fintech industry. Whereas financial technology was once regarded as a back-office support tool for traders and bankers, over the last ten years, the share of investment dollars in the fintech industry increased by 15 per cent (Investopedia. 2019). This is the same share of GDP attributed to the financial sector.

Digitalisation is present right across the modern-day value chain, with raw automation being applied to onboarding, servicing, and assessing customers. Innovative businesses invest in Natural Language Processing (NLP) and machine learning to generate customer chatbots, replacing the need for live agents.

This straightforward automation has created huge vertical competition between different industry sectors, as they attempt to cross-sell their services. Leading digital lenders are now competing with cutting-edge digital payment applications to provide the best digital banking services.

Many banks collaborate with fintechs or create new financial technology services to provide digital solutions for today’s tech-savvy investors. An example of successful collaborations can be seen in Goldman Sachs recent acquisitions( 2020) that add value to their digital banking services.

Larger businesses such as Banco Santander, and JP Morgan Chase & Co have launched fresh takes on product-led solutions.


Modern-day financial infrastructure is being challenged by blockchain-native finance. Compared to the legacy chassis, blockchain provides digital scarcity, trading and underwriting engines, money movement, account opening, and built-in settlements.

Today, financial institutions have invested an estimated $552 million on blockchain-powered projects, while 90% (Fortunly. 2019) of U.S. and European banks had already started exploring blockchain’s potential by 2018.

Each year, crypto miners spend billions of dollars providing cybersecurity and data protection. These miners are supported by a myriad of open-source developers that regularly improve and update software for all users. Today’s markets mat still be obsessed with Bitcoin’s financial attributes, but programmable blockchain networks such as Ethrereum have re-invented data standards, creating a more efficient finance factory.


The level of apparent disruption across the financial services industry is continuing at unprecedented rates, with fintech companies and new technologies changing and enhancing the way money is distributed.

Jeffrey Cole, Creative Director at the Centre for the Digital Future, has said, “one of the lessons of disruption which applies to banks, is offline legacy means nothing online.” ( 2020)

Larger banks are starting to compete with much smaller companies concerning customer service, technology, and scope. Fintech companies are replicating parts of banks and turning them into global businesses that offer seamless online experiences for customers.

Indeed, AI, blockchain, the Internet of Things and mobile technology are helping the finance industry to evolve. Large tech companies are turning to finance, and competition is fierce across the neo-financial landscape.

Financial institutions and professionals who fail to embrace decentralisation and the technologies that support this evolution could potentially fall behind, leaving their customers little choice but to choose an alternative financial partner.


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The Motley Fool. 2019. “Everything You Need To Know About Investing in Technology”. Retrieved from

Investopedia. 2020. “A History of Apple Stock Increases.” Retrieved from

Fidelity Investments. 2020. “AI to Enhance Investment Decision-Making”. Retrieved from

Finextra. 2019. “Key Benefits of Robo-Advisors in Fintech.” Retrieved from


JD Supra. 2020. “Libra 2.0 — From Global Currency to a Payment Method on Facebook’s Platform.” Retrieved from

FINSMES. 2020. “What Are Neo-Banks and How Will They Shape the Future of Finance?.” Retrieved from

Crowdcube. 2019. “Revolut, a Crowdcube Success Story.” Retrieved from

Investopedia. 2019. “The Future of Fintech.” Retrieved from 2020. “Meet Your AI-Powered Financial Champion.” Retrieved from

Fortunly. 2019. “45 Blockchain Statistics & Facts That Will Make You Think: The Dawn of Hypercapitalism.” Retrieved from 2020. “Is Fintech the Future of Banking?” Retrieved from

Originally published on on May 27th 2020.




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