Fintech
The biggest Fintech trends in the next 10 years
If in politics a week is a long time, in the world of technology ten years is an eternity.
I write about it often technological trends this will be relevant in the short to medium term, as they are very likely to be useful to my corporate clients. But sometimes it’s interesting to look a little further ahead.
Of course, it’s much harder to predict what will be important ten years from now than what will be commonplace in the next 12 months. But by extrapolating current trends we can still find some interesting ideas.
So, here are what I believe will be the hottest topics of conversation in financial technology when 2035 is right around the corner rather than a dot on the distant horizon. Some are exciting, some are beyond scary, but they are all real possibilities.
Autonomous financial ecosystems
Within a decade, it is possible that AI will have evolved from its current role of assisting financial decision-making and automating customer services to autonomously managing entire financial systems. Dynamic risk assessment, asset management, financial forecasting and fraud detection will no longer be performed across disparate, siled systems. Instead, they will be managed as integrated services, with advanced, centralized artificial intelligence that predicts and reacts to market movements, customer behavior and regulatory changes in real time.
Human intervention will be significantly reduced as these autonomous systems increasingly handle back and front-office services. Financial services institutions will offer hyper-personalized services to customers based on an in-depth understanding of their individual circumstances. This will increase access to financing and investment opportunities for many currently underserved segments of the population. However, ethical concerns about privacy, data protection and the potential dangers of systemic prejudice being amplified by AI will be more urgent than ever.
Universal digital currencies
As we approach 2034, today’s cryptocurrencies, as well as central bank digital currency (CBDC) experiments conducted in many countries, may have led to a shift towards mainstream adoption of universal digital currencies. It remains to be seen whether this is Bitcoin, which has steadily grown in popularity and value since it was introduced to the world in 2009, or whether it is some evolution of the blockchain technology at its core. In addition to allowing individuals to make peer-to-peer digital transactions without the need for intermediary services such as banks or payment providers, digital currencies could pave the way for “programmable money,” powered by smart contracts that execute automatically when pre-set conditions are met. satisfied, for example when goods are received or a job is completed. Over the next 10 years, we will discover whether and how these innovations will have a real impact on traditional financial systems and better understand the opportunities they create for financial innovation.
The virtual economy
One thing we can count on is that over the next 10 years we will continue to live an increasingly online and connected life. We will spend more time in virtual worlds and environments, and these places will develop their own economies and financial systems as those of the “real world” evolve.
Children today are just as likely – perhaps more so – to ask for Robux as they are for pocket money. The trend towards owning virtual real estate and digital assets is likely to continue as online spaces become more engaging, accessible and integrated into our lives.
Entire virtual economies could emerge by 2035, complete with currencies, financial systems and regulatory frameworks. These could be driven by user-generated content, virtual jobs (content creators, virtual architects, virtual event organizers), blockchain-based transactional systems, and collaborative and immersive user experiences.
Secure quantum finance
In the next decade, developing security systems that can withstand immensely powerful quantum computing systems will become a priority. Quantum computers take advantage of the strange and unusual qualities of quantum mechanics, such as entanglement and superposition, to perform some calculations millions of times faster than conventional computers. This creates the risk that encryption systems in use today, such as RSA encryption, will be trivially overcome. While today’s quantum computers are expensive and have limited capabilities, by 2035 they could be many orders of magnitude more powerful and widely available. This means that developing ways to secure transactions and protect private information is an urgent priority for banks and financial services institutions and a hotbed of fintech activity and innovation.
The rise of bio-fintech and neuro-fintech
Fintech stands out as an industry that will almost certainly be revolutionized by the emergence of biotechnology and neurotechnology over the next decade. This may include financial instruments and applications run through brain-computer interfaces (BCI), allowing us to transfer money with a thought and a handshake. Your data and identity will be protected by increasingly sophisticated forms of biometric security, and biometric or neurological information will be used to improve fraud detection or offer us personalized financial products. Clearly, this creates enormous ethical challenges and by 2035 society will be hotly debating how much access banks and other financial institutions should have to information about our biological composition and even their ability to access our innermost thoughts.