I had the opportunity to attend the 63rd Saddlerock Advisors NYC FinTech event this year. The investor showcase and networking event was held to offer insight and background on emerging technologies within the financial services industry.
Source: Pexels.com under CC license.
All three companies spoke on areas that are leveraging technology that helps FS firms transform their business and provide solutions and services that help connect with consumers, comply with global regulations and gain a leg up on competition in emerging technology markets.
Mobile banking has transformed the banking world. An errand like stopping by the bank branch feels like a massive inconvenience. Paying bills from your smartwatch, on the other hand, is completely natural and intuitive. Today and for future generations, financial management and technology will be intertwined.
Both major banks and startups around the world are exploring the technology behind the blockchain, which stores and records Bitcoin transactions. This technology could lower the cost of many financial activities to near-zero. This would have a dramatic effect on big banks, which currently face high operating costs.
For a long time, new market entrants found it difficult to break into the financial services industry. The large, well-established financial institutions had advantages in size, and their networks added a multiplier effect. Disruptors are fast-moving companies, often start-ups, focused on a particular innovative technology or process in everything from mobile payments to blockchain. And, they have been attacking some of the most profitable elements of the financial services value chain.
It is clear that technology is impacting financial services in a variety of ways. Financial services firms believe digital capabilities are the driver to their competitiveness. Cloud, blockchain, AI and cryptocurrencies are just some of the key innovations and technologies that are disrupting the industry, creating a level of competitive intensity.
These disruptors have the advantage of not being encumbered by legacy systems and processes. As a result, FinTech firms are generally able to innovate faster and develop solutions that compete directly with traditional methods of delivering financial services.
Financial services firms understand that digital capabilities are foundational to their competitiveness, and they’re strategically investing in the future. FinTech firms and non-financial tech companies are edging into all areas of financial services. There is talk that within five years consumers will do most of their savings, investing and borrowing through non-finance platforms like Amazon and Google.
It’s an interesting time to be involved in financial services.