Automobiles, healthcare, entertainment, personal banking… it seems every sector in the world is undergoing rapid disruption at the hands of technology. Financial services, though often slower to adapt than Silicon Valley, is no different. A growing base of Millennials investors is forcing firms to rethink everything from portfolio construction to digital customer support.
Here’s a look at the top three fintech trends to keep an eye on this year.
There’s a lot of hype (and misinformation) around Blockchain due to its association with the highly volatile crypto-markets. But at its core, Blockchain promises to make the world – and capital markets – a safer place.
For the uninitiated, Blockchain is a decentralized system which records transactions in a distributed database that can’t retroactively be altered or forged. Applications outside of financial services include digital IDs, medical records, weapons tracking and preventing copywriting. Blockchain is set to be a big disruptor in asset management too, by facilitating real-time asset tracking and reducing the risk of a data breach to zero.
Artificial Intelligence And Big Data
In today’s world, data is being generated faster than ever. Internet usage alone produces 2.5 quintillion bytes of data each day, and that’s just the tip of the iceberg. Credit card transactions, satellite imagery, shipping maps, weather forecasts… the list is endless, and asset managers that move fast enough to mine this data will supercharge research operations, alpha generation, and risk management.
While the sheer amount of data is ballooning, fortunately advances in artificial intelligence are making it possible for asset managers to actually analyze the data to find signal in the noise. Regulators like the U.S. Securities and Exchange Commission are experimenting with AI to rake through the data garnered from asset manager’s regulatory reporting. Meanwhile, AI will be used to automate many mundane and repetitive asset management tasks including data entry, fraud detection, data cleaning, and customer support.
Cloud-Based Data Warehousing