BITCOIN, ICOS AND AI TOP DEVELOPING FINTECH TRENDS, SAYS REPORT
This weekend, the banking sector will begin its implementation of Open Banking, or more simply put – with the permission of customers – UK banks will now be required to unlock previously withheld spending data previously unavailable to other financial service providers. Yet as the fintech boom ushers in new areas of industry offerings, a new report highlights the ‘Fads, Fears and Future’ of fintech.
Published earlier this week, the report, compiled by global PR and digital marketing agency, FleishmanHillard Fishburn (FHF), gathers insights from 30 experts from leading financial brands such as Santander, Citi, Western Union and Visa, amongst others. Identifying key trends in the industry, respondents singled out Initial Coin Offerings (ICOs) as one of the most over-hyped trends of last year, suggesting that the crowdfunding cryptocurrency yields greater risks than opportunities.
Yet the Open Banking move aims to support the Bank of England’s ‘fintech accelerator,’ with provisions geared towards bringing more competition to the banking sector. Within the report, 85% of respondents believe Open Banking, as well as the Payment Services Directive Two (mirrored across Europe as holding similar requirements for banks), remains the most important development for the financial services sector in 2018.
For many however, Bitcoin still poses a major concern as its temperamental volatility continues to disrupt the financial status quo. Yet for Jonathan Vaux, executive director of innovation and partnerships at Visa Europe, this is not the case. “I think we can safely expect the [Bitcoin] bubble to burst at some point as people break from the ‘inner circle.’”
Elsewhere, General Data Protection Regulation (GDPR) similarly remains a key legislative consideration in the coming year, as organisation pare down on cyber security and data becomes a key tool in reaching consumers across the sector. Yet interestingly, the report revealed that artificial intelligence (AI) was identified as the second biggest opportunity for 2018, despite the report also revealing that last year’s AI expectations were largely overhyped.
Yet as AI remains one of the most potentially prosperous developments for several industries, its risk of privatisation, bad oversight and regulatory misfire continues to contribute to its equally enigmatic trajectory. Last month, FHF introduced its ‘Money Talks’ series, focusing on gathering further insights on the future of the sector. A key point consistent throughout the inaugural discussion, centred around the relation between customer care and innovation, and that without the former, the latter would consequently suffer.
Claudia Bate, head of financial services and fintech at FHF, says, “What’s interesting is that our experts identified that an overhyped fad and the future of finance are not necessarily mutually exclusive. Take AI for example – even a number of AI providers we spoke to admit that the technology was hugely overhyped in 2017. That’s not to say that AI won’t completely alter the financial services industry in the future, but likely in a more measured way.”
For a closer look at the report, click here.