I’ve been involved in finance and technology for a long, long time. Originally, I was a technologist; then a financial technologist; and now a FinTech guy. However, I see the FinTech piece as being irrelevant. Whether it’s FinTech or TechFin, it’s all still just finance and technology. The difference is that instead of being separated, it’s now integrated.
That means, in a few years, we will stop talking about FinTech, TechFin and such like, and just talk about finance delivered by technology … in a whole, new way.
The first way we find finance delivered by technology different is that it will be real-time. We will be able to fund, save, spend, invest, transact, trade, borrow and more in time windows identified as relevant to us, not in annualised products offered by institutions. The only reason products were annual is because it was too difficult to service them more regularly in a physical distribution model with buildings and humans. In a digital distribution model, software, servers and algorithms can offer everything immediately and for as long as you want. Forget a yearly service, let’s just borrow for the next few hours.
The second way we find finance delivered by technology different is that it will be all the time and everywhere. The idea of any downtime anytime will be unacceptable. If I want it, I want it now, so let me get it now. Whether I’m in the mountains of the Himalayas or in Timbuktu, I want it and I want it now. Any barriers to access will be seen as a reason to switch to another provider.
The third way we find finance delivered by technology different is that it is seamless. I don’t want to think about money and banking, but want it to be stitched into the fabric of my lifestyle, and supportive of the way I live. Banking should be invisible, frictionless and seamless. If I need to think about my money, it’s purely because my devices are telling me there’s something important to think about. Otherwise, I don’t want to know.
The fourth way we find finance delivered by technology different is that it is personalised. If things are happening in my financial world I should know about, then tell me to my face or, rather, my device. So, I shouldn’t need to be concerned about covering my next mortgage payment by moving funding from savings unless my savings account is empty. But if it’s empty, don’t tell me your savings account is empty but tell me Chris, you have funds arriving next week but your mortgage payment goes out today … don’t worry about it, I’ve taken care of it by using a 12-hour loan facility at a cost of $5. If you want to change this, swipe here.
The fifth way we find finance delivered by technology different is that it is not only personalised but predictive. That’s kind of illustrated by the point above, but it goes far further and deeper than this. With deep mining of my financial lifestyle data, the bank should be able to predict my financial lifestyle needs. My favourite example of this today is the bank that works out I catch the subway every day but always pay day-by-day, rather than taking out a season ticket. That’s because I don’t have funds for a season ticket, so the bank says Hey Chris, you could save €1,000 a quarter with a season ticket for €2,500; swipe here if you want one. OK, so the bank is wrapping up a personalised offer in a loan, but at least they’ve mined my data, worked out why I can’t buy a season ticket and offered one based upon predictive and personalised contextual information. Thanks.
The sixth way we find finance delivered by technology different is that it is for everyone. Why should anyone be unable to move money between friends and family? Why should banking only be for the rich? Everyone should have a basic human right to send money freely, cheaply and easily to anyone else, and this is being delivered by technology services for the unbanked, underbanked and underserved. In fact, the biggest change in our world in the last decade is that digital services can reach the unreachable. It’s a major transformation to everything in life.
The seventh way in which we find finance delivered by technology different is that it reaches the unreachable. Building on the last point, the new world of finance can reach the long tail of customers previously overlooked and start doing new things for them. The long tail are kids who are uneducated in money who now get financial literacy through apps. The long tail is the elderly who are scammed and conned because they are financially vulnerable are now protected through connectivity to those who care about them. The long tail are the addicts, the depressed, the gamblers and the mentally ill who need help with their financial accounts, so they don’t drain them of funds on activities that they are trying to get away from. All of these people are now reachable and capable of being supported rather than over-looked.
There are many more ways in which finance delivered by technology is different, but we will soon stop calling it disruptive, innovative or FinTech. It will just be a new world of finance that has been digitally transformed.
We are but on the start of the road of that transformation and it is already transforming lives and lifestyles. Just wait for a decade from now when its journey has matured a little into finding a destination. It will be fascinating to see where it goes.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...