{"id":10331,"date":"2016-09-13T12:15:55","date_gmt":"2016-09-13T16:15:55","guid":{"rendered":"http:\/\/www.analystik.ca\/blogue\/?p=10331"},"modified":"2017-05-26T14:03:03","modified_gmt":"2017-05-26T18:03:03","slug":"disruptions-in-banking-and-financing-on-the-horizon","status":"publish","type":"post","link":"https:\/\/analystik.ca\/blogue\/language\/en\/disruptions-in-banking-and-financing-on-the-horizon\/","title":{"rendered":"Disruptions in Banking and Financing on the horizon, brace for impact"},"content":{"rendered":"

Major disruptions in Banking and Financing on the horizon; thanks to new technologies from Big Data Analytics to Mobile Apps that are reshaping this sector at a fast pace, resulting in new ways for companies and customers & consumers to interact, to manage their money and to conduct transactions.<\/p>\n

Global investment in Fintech ventures hit $5.7 billion in the first quarter of 2016<\/strong>, and about half the funding went to projects in Asia, primarily in China. \u201cThe reason funding is taking off now is that the four platforms \u2013 Mobility, Big Data (IoT) and Analytics, Blockchain Technology (Bitcoin) <\/strong>and Machine Learning (AI)<\/strong> \u2013 are in their infancy,\u201d said\u00a0Catherine Wood<\/strong>, CEO of ARK Investment Management (US) at the Annual Meeting of the New Champions<\/strong> in 2016.<\/p>\n

The fact is that Banking and Financial Services is one of the largest industries that is still not fully digitalized. In this field of activities, the technological revolution has just begun.<\/p>\n

So let\u2019s see what we\u2019re up to and what major disruptions we may foresee.<\/p>\n

Overview of upcoming disruptions in Banking and Financing<\/h2>\n

<\/p>\n

Mobility<\/strong><\/h3>\n

In regards to Mobility, the thing is, consumers are getting used very fast to be able to bank and finance at the fingertips<\/em><\/strong>, anytime, anywhere<\/strong>, now!\u00a0 And that\u2019s just going to accelerate. The key concept here is \u201canytime<\/strong>, anywhere<\/strong>\u201d; meaning that, intermediary or third-party service is being taken out of the picture, and maybe even also humans… soon!<\/p>\n

Fintechs are growing rapidly mostly because they solve \u201creal problems for consumers,\u201d said\u00a0Taavet Hinrikus<\/strong>, CEO of TransferWise (UK) and Co-Chair of the Annual Meeting of the New Champions 2016. \u00a0\u201cSolutions such as digital remittances are typically much cheaper than banking transactions like wire transfers and are often executed directly on mobile platforms, which means that they are inclusive and widely available,\u201d he added.<\/p>\n

\u201cIn terms of Mobile Lending and other Fintech solutions, China is leading the world,\u201d\u00a0Tang Ning<\/strong>, Founder & CEO of CreditEase (China). \u201cVenture capital is paying attention to the wrong things in fintech,\u201d he asserted. \u201cThe quality of credit and risk management are fundamental things to which investors should pay attention to,\u201d he added.<\/p>\n

So, does that mean that Banks and Financial Institutions\u2019 local branches are going to disappear completely? Most probably\u2026 at the least, certainly in many many local areas.<\/p>\n

 <\/p>\n

Big Data plus IoT<\/strong><\/h3>\n

A key factor in the growth of Fintech has been the growth and increasing sophistication of Big Data Analytics. \u201cThe quality of data is very important,\u201d said Xu Haotian<\/strong>, CEO of Fangcheng Technology (China).<\/p>\n

The fact is that Big Data will grow much bigger, exponentially, with the help of IoT. And that\u2019s something pretty big to take into account, the two will work hand in hand, providing information and data in an automated fashion for and from a plethora of services including financial transactions for P2P, P2M, M2P and, of course, M2M. That\u2019s a pretty big deal, too.<\/p>\n

Let\u2019s add that in the case of Internet of Things (IoT),<\/strong> there is an urgent\u00a0need for a blockchain-type settlement system underneath<\/strong> simply because Banks & Financial Institutions won\u2019t be able to settle trillions of trillions of real-time transactions between things.<\/p>\n

 <\/p>\n

Blockchain Technology<\/strong><\/h3>\n

So, what is \u201cBlockchain Technology\u201d and how will it impact our lives and the way we do Banking and Financing?<\/p>\n

Dan Tapscott, in an interview with McKinsey, describes it this way:\u201d The Blockchain is basically a distributed database providing direct p2p transactional service<\/strong> which, by means of state-of-the-art cryptography, can securely and immutably record any type of transactions without the need of third-parties.\u201d<\/p>\n

\u201csecurely and immutably record any type of transactions<\/strong>\u201d is a pretty big deal, in the sense, that it could record any structured information, not just who paid whom but also who married whom or who owns what land or what light bought power from what power source.<\/p>\n

That\u2019s worth noticing and understanding.<\/p>\n

\u201cwithout the need of third-parties<\/strong>\u201d is also a pretty big deal too, as pointed out by Michael Mainelli, executive chairman of Z\/Yen Consulting Group (London, UK), who says that \u201cBlockchain Technology is likely to transform all financial markets because they rely on trusted third-parties,\u201d suggesting that Blockchain Technology could displace traditional trusted third-party functions in banking, securities and insurance.<\/p>\n

In short, Banks and Financial Institutions will have to hop aboard the Blockchain Technology wagon very soon if they don\u2019t want to be left behind.<\/p>\n

Dan Tapscott goes even further believing that Blockchain Technology could offer genuine privacy<\/strong> protection<\/strong> and \u201ca platform for truth and trust<\/strong>.\u201d<\/p>\n

Three points worth noticing, according to Dan:<\/p>\n