As one of the fastest growing industries today, the Fintech industry is set to expand even more in 2017. Defined as computer programs and other technology used to support or enable banking and financial services, it is understandable that Fintech will become an increasingly important international player as globalization continues and individuals as well as businesses are looking to more efficient and clever ways to manage their money, both locally and internationally.
According to Centric Digital, “financial executives increasingly view Fintech firms as good partners and targets for acquisition, while also acknowledging that they are setting the benchmark standards for the financial industry moving forward”.
While 2016 was a more difficult year for Fintech, especially for startups in the industry, 2017 offers a sunnier forecast. Advances in both the financial industry and technology are sure to be expected and startups will gain a lot of traction. Yet Starling Bank, a prominent bank in the United Kingdom, believes the Fintech industry should also practice caution in 2017. In a prediction article, the bank states the following: “Whilst no longer a nascent industry, having moved into the mainstream, the narrative [of Fintech] has become stuck in its own echo-chamber and lost sight of its original purpose: empowering customers”.
Here are some of the key trends predicted within the Fintech industry during 2017.
China will lead the industry in 2017
According to Coin Telegraph, analysts from major research and development firms, including EY and DBS, expect China to lead the global Fintech industry in 2017. Anticipating their role, the country has already established support for startups in the form of consortiums and organizations focused specifically toward this goal.
When the people of China adopt new technology, the rest of the world naturally follows and it seems that millions of consumers on the mainland are abandoning traditional banking systems for more efficient, technologically advanced alternatives.
Consortiums are a key feature here. A widely accepted, and highly successful, method of growth in China is for industries to collaborate wherever they see opportunity. Coin Telegraph explains that “Chinese industry leaders [will] form a consortium to ensure that investments and resources are rightfully allocated to help startups and innovative service providers to grow”.
Furthermore, it is relatively simple for large-scale corporations and high profile investors to invest in startups in China. To further ensure the various fields within the Chinese Fintech industry receive sufficient capital and resources, Chinese state-owned companies formed a consortium called “Asia FinTech Merger and Acquisition Fund of Funds”.
Insurance will serve the user
With a surge in startups in the insurance industry, consumers have started realizing that they need not stick with their traditional insurer, which mostly serves the company, not the individual. It may seem unlikely, but these startups have managed to make insurance more accessible and much more satisfying for their clients. According to Centric Digital, this surge is only expected to gain momentum as modern insurance companies are moving away from dated models and toward ideas like preventative care instead of reactive.
Fintech will empower users
The tendency of big banks, which currently still dominate the industry, is to educate their customers. Starling Bank reckons Fintech has a sound advantage and ready opportunity because of this. The prediction is that Fintech will arm consumers with the tools to empower themselves. As long as startups strive for a customer-centric approach and remain transparent, they will draw the mobile generation who want to feel empowered by technology, not restricted, or kept in the dark.