The digital transformation of financial services is rushing ahead, but unevenly and uncertainly. For every bold proclamation there is also inertia, or simply a bad business model.
2017 will be remembered as the year of the crypto-currency boom – that is, as a giant speculative mania – but it’s also the beginning of the token economy.
Bitcoin’s amazing rise and the ICO phenomenon provided the greatest drama to the year. More quietly, financial utilities’ blockchain experiments have gathered steam, but use cases or appetite among financial institutions to replace legacy systems remain elusive.
Artificial intelligence became the other hot topic. It didn’t displace ‘big data’ as the trend so much as supercharge it.
Nowhere is this being demonstrated more clearly than in China. 2017 was also the year when these ‘techfins’ made more substantial forays into overseas markets, such as Lufax’s obtaining a Singapore retail asset management license, Alipay and Tenpay making inroads into Hong Kong payments, and several Chinese P2Ps getting listed in New York.
This was also the year when some big financial institutions fully embraced open APIs, the first step to realizing both computerized personalization and partnerships to reach consumers (i.e., the ‘ecosystem’), but it was also the year WannaCry and other malware reminded us how challenging it will be to make a connected, digital world also a safe one.
Apple’s new iPhone X made facial recognition acceptable to consumers, but digital solutions to identity, KYC, and other compliance problems have yet to find consensus among regulators or financial institutions.
While these and other digital trends will continue to shake up the world of finance, DigFin would like to suggest a few questions that will loom over the coming year. We suspect these will be the questions we’ll be writing about throughout 2018. DigFin would love to hear from you too – let us know what other questions we should ask – or tell us if you’d like to suggest some answers!
- Is regulation of crypto-currencies inevitable?
- China has grabbed the position as the world’s leading fintech market, but will Chinese ‘techfin’ travel?
- Is the sleeping giant of fintech – the FANGs – about to awake?
- Vikram Pandit says A.I. and robotics should reduce bank employees by 30% in the next five years; is he right?
- What’s the role of branding in a data-driven financial system?
- Will bank-skeptical millennials come to trust certain fintech companies, or will they just keep surfing trends?
- Is digital identity actually increasing data security, or setting us up for an almighty crisis?
DigFin will be back in January. We wish everyone happy holidays, and a terrific new year.