The fintech industry is changing rapidly, and it's hard to predict what the future will entail. But in this article, we are going to try our best!
We have compiled some predictions for the far future of the fintech industry by 2050.
Some of these predictions are wilder than others, but they all paint a picture of how things might be within thirty years.
Fintech predictions for 2050
Improved Customer Experience
Jeffrey Kump, Head of Payments at CSG
The evolution of the payment's ecosystem will be like when a jet plane takes off from the runway – fast, shaky, sudden, and you are cruising at 30,000 feet before you know it.
The payments ecosystem will continue to be pushed by customer demands for increased personalisation and customisation while enabling real-time, seamless transactions anywhere and at any time.
The convenience of cashless transactions and future payments technologies will drive customer experience expectations to even higher bounds.
Today, consumers can tap their Apple Watch at the coffee shop because they forgot their wallet or use Venmo to pay their friend for dinner.
In 2050, the payments ecosystem (acquirers, PSPs, facilitators, and aggregators) will revolve around creating integrated capabilities within an ecosystem of partners to truly optimise the customer experience and deliver a seamless, personalised payments journey from awareness to purchase and long-term retention.
The companies that offer this holistic and frictionless, almost invisible payment transaction and focus on the customer experience will soar high at the front of the payments industry cruising at 30,000 feet.
As for the others, they will be in the clouds wondering why they are losing elevation.
Trish Cox, Head of Operations at Galileo Financial Technologies
No matter what fintech innovations come between now and 2050, fintechs, banks, or anyone else providing financial services or any kind of service can't lose sight of how critical it is to listen to the customer to inform the experiences they create and the product features they build.
Whether customers are interacting with chatbots, physical robots, humans or some technology that's yet to be imagined, businesses must make them feel that they're being listened to and cared for, especially when it comes to their money.
What's exciting to me about the future of fintech is how we'll be using technology and open data to gather customer feedback and relevant insights and then acting on them to continue to expand the financial frontier.
Metaverse, Web 3.0, and Interplanetary Payments
Pawel Oltuszyk, Co-Founder and CEO at Frost
In this sector, it's difficult to predict what will happen in three weeks, never mind in three decades. Still, it's an interesting question and one that I think many of us should be asking ourselves more regularly. For me, we've already seen glimpses of the future with developments like the metaverse and Web 3.0.
I wonder how fintech will evolve in these environments and how advancements in augmented and virtual reality applications will shape the field. I can actually foresee a world in the not-too-distant future where individuals make payments using their minds, which would take 'contactless' to a whole new level.
Similarly, by 2050, will we live in a world where humans have mastered the art of cross-border payments and are now focused on inter-planetary ones instead? It sounds like science fiction, but the world of technology and fintech has moved so quickly in the last decade that it's not entirely beyond the realms of possibility.
DeFi and Cryptocurrencies
Leon Wilson, CEO and co-founder of PollenPay
I think when people try and envision what the future will look like, they tend to conjure up some pretty outlandish ideas, but things normally work in a more linear fashion. With that in mind, I've tried to imagine what the trends of today will look like in a few decades time and how that will impact our everyday lives.
I'm going to nail my colours to the mast and say that by 2050, cryptocurrencies will have overtaken fiat currency as the primary form of money used across most financial transactions. I don't think that this digital currency will necessarily be Bitcoin, but I can see how it could be a contender.
Instead, I envision projects such as Radix DLT, Hex or Pulsechain moving to the forefront of the space. Bitcoin was the foundation and validation, although some might argue one dimensional in its game theory, as a store of value.
Hex offers a store of value, which is designed to go up in price whilst also delivering high yields, whereas Pulsechain aims to rectify Ethereum's issues with gas charges. Alongside these two, there are a few other cryptocurrencies, which could soon help to pave the way for even bigger and more elaborate projects in the space.
The crypto movement was designed around the tenets of public and mass inclusion, without limitations - it's for everyone.
In general, cryptocurrencies are on a massive upward trajectory and beginning to receive significant interest from legacy financial institutions, as well as from major corporations. There are now few obstacles left in the way of their full ascension, and I think we will see that by 2050, if not even a bit earlier.
Grant Colhoun, Founder and CEO at Okanii
We see all of the world's assets digitised on a single decentralised but interoperable platform under a Digital Asset model vs a Digital Ledger model. This Digital Asset Tokenisation (DAT) model will allow everyone (central banks, banks, telco's, merchants, corporations, merchants and consumers) to effortlessly and frictionlessly tokenise any asset they want and instantly trade it with anyone else across any use-case, instantly, securely, and at near-zero cost.
The implications and potential use-cases are endless, turning everything into pay per "metered" use-case, autonomous vehicles per mile, toll roads, quantum q-bit processing cycles/computational power, A.I. assistance/automation, call-centre support, and so forth. Everything will evolve to a micro-payment per use model turning once cost centres into revenue streams.
A recent example of this shift can be seen in the global shift towards the gig economy and remote working. The ability to pay people daily/hourly/task-based for their services will become the norm allowing a greater balancing of time/cashflows for everyone.
The tokenised economy is the direct peer to peer trading/transfer of all assets instantly to anyone anytime. It is about empowering everyone everywhere! A digital tide to rise all digital boats.
Sarah Biller, Co-Founder of FinTech Sandbox and Executive Director of Vantage Ventures
Less Is More: The confluence of frictionless and permission-less transactions made possible by Decentralised Finance protocols and the metaverse - an interoperable, digital world where people converse, earn and spend - will fundamentally alter how our global Capital Markets work by 2030.
Equity and debt investors will no longer be defined by mean-variance metrics but by their ability to meet an unprecedented shift in demand for new financial services and products that bend to an immersive world where real and virtual assets blur.
Trillions of dollars of new investment opportunities will go to those who build fluid, optimised real-time risk management systems for a future based on programmable money.
Artificial Intelligence, Embedded Finance, and Robot-Enabled Platforms
Dileep Jacob, Senior Vice President of Global Operations at Fingent
FinTech's landscape is undergoing a significant change with each passing day. As a result of the pandemic, the FinTech market exploded. During COVID-19, agency banking grew widespread in the financial system. The advent of cutting-edge technologies has also opened up new FinTech horizons.
Fintech is replacing traditional banking methods with technology like Machine Learning, complex algorithms, and big data. Fintech, as we know it today, will be outdated in the next decade. Instead, we'll be living in a world where finance is embedded. Embedded finance refers to when a software company incorporates financial services within its offerings.
Some believe that banking's future should be invisible, linked, insight-driven, and purposeful. Banks should take the lead in offering advice and cultivating financial intimacy with their consumers. Communities driven by a common goal will emerge, resulting in collaborative product development that will benefit everybody. Banks have increased their role in permission and identity, giving customers more control over their financial and digital accounts. Banks that offer embedded financial services may find it challenging to distinguish themselves from traditional consumers. The consumer's trust in the financial industry is the most valuable asset.
Some people are still resistant to technology, but those who do can succeed. Digital and emerging technologies are transforming the front, middle, and back-office; AI and automation are proving to be valuable; even the cloud is evolving. Banks will need to decide how to use media and the data behind them to grow by leveraging platforms and monetising data.
Automation and artificial intelligence will replace human thinking. The necessity of a well-thought-out ecosystem plan is crucial, as is effective orchestration. Customers can share their financial data with other apps and vice versa via open banking. Real-time intelligent data integration is also possible with hybrid cloud (cloud/server) solutions. The most prevalent technology for automating fixed and repetitive procedures is robotic process automation or RPA.
Everything from data entry to loan form processing is done by machines using basic algorithms. RPA enables banks to save money, reduce human error, and speed up procedures. In addition, it can help financial organisations improve compliance and auditing by having all data in one location.
AI, IoT, Blockchain, and Cloud Computing are just a few technologies that are already changing how customers engage with businesses and handle their finances. For example, financial markets permit algorithmic or automated trading in the Stock Exchange thanks to AI and machine learning. Automation has increased due to new data processing and analytic tools and technologies, particularly in asset rebalancing. Robot-enabled platforms advise customers on investing and asset management. Regtech systems monitor transactions and spot outliers that could suggest fraudulent behaviour.
FinTech is revolutionising our lives and habits by making it simple to trade, bank, and exchange money. However, the financial sector has several hurdles to overcome to gain customer trust. Therefore, business leaders should look for ways to incorporate FinTech into their business models.
Kimberley Waldron, Managing Director at SkyParlour
It might feel like a distant future, but we're now closer to 2050 than we are to 1990. I'll be really interested to see how behavioural data is leveraged to improve the responsiveness and efficiency of both marketing and financial services over the next 30 years. In my mind, it won't be long before this plays a major role in our everyday lives.
In practice, I imagine that marketing and financial services may soon become intrinsically linked. These services could be embedded and instinctively tailored to you and your needs, using artificial intelligence systems that analyse your behaviours. I'm not sure if that thought excites me or terrifies me, but it's certainly a distinct possibility.
As a public relations agency dedicated to the fintech space, we see first-hand the rapid rate of advancement within the sector, which often outpaces regulatory oversight. Therefore, it will be fascinating to see if national governments look to curb this growth as time moves on, especially if it begins to threaten legacy financial institutions.
Automated Clearing House (ACH) and Real-Time Payments (RTP)
Jed Rice, CEO at Aliaswire
Faster payments make a big difference – especially for businesses. ACH payments have always been cheaper than credit cards, but the validation process has also made them significantly slower. As a result, many billers push their customers to credit cards for the speed and certainty of funds. Nacha has been working closely with the payments ecosystem to streamline the account validation process and expand the use of same-day ACH. They want to mirror the speed of a credit card transaction while still offering the substantial cost benefits of ACH. This will gain a lot of momentum in 2022.
As more and more consumers manage their finances online and use consumer payment applications, they have come to expect the ability to make real-time payments in both their personal and business lives. Banks and fintech are investing significantly to make RTP a standard in B2B as well. Two immediate factors will accelerate this shift. One, as supply chains continue to get squeezed, customers are looking for ways to get their goods shipped more quickly. Suppliers will prioritise those buyers who pay more quickly. Two, suppliers also want to reduce their cost of getting paid. That means avoiding card payments wherever it makes sense.
New bank-powered rails like The Clearing House (TCH) RTP network are not only accelerating the speed of payments; they are also reducing the cost and limiting the risk of fraud. RTPs also shift the risk of charge-back, which is the number one risk in the credit card business, to the buyer. Overall, RTP eliminates a lot of friction for the buyer and the seller, and that will drive adoption in a big way.
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