Jun 15, 2020

Fintech and smart cities: the future?

Fintech
Banking
Matt High
2 min
SMart city
How does a mobile-first, digital banking industry interact with future smart cities? We look to the Middle East to find out...

Technology is developing at an incredible rate, and at every turn.

Smart or digital technologies are no longer used in isolation. Rather networks, connectivity and digital ecosystems are driving change for consumers and industries alike.

The smart city stands at the apex of this development. But how will banks - both digital and bricks-and-mortar evolve with this change?

Earlier this year, we looked at how fintech is shaping the development of smart cities, particularly thos rapidly growing urban centres in the Middle East.

When it comes to harnessing financial technology to foster the creation of smart cities, the UAE remains ahead of the curve.

For example, the number of fintechs in the UAE is expected to grow by as much as 230%, from 559 companies.

By 2022, the fintech market is estimated to reach a value of $2.5bn across the broader MENA region, according to Accenture.

Smart Dubai

Smart Dubai champions smart city initiatives across the region.

The initiative seeks to harness AI, data and blockchain in order to drive Dubai’s economy and achieve the ultimate goal of making it entirely paperless.

Government-owned bank, Emirates NBD, is driving this change by undertaking one of the largest digital transformations in the region.

In addition to this, it also launched digital banks Liv and E-20, which are driving fintech capital.

The Dubai International Financial Centre (DIFC)

The DIFC is the region's largest financial ecosystem, comprising over 24,000 professionals across 2,200 companies.

It nurtures fintech growth in the region through The FinTech Hive, which runs an annual accelerator programme that provides mentoring, funding opportunities and marketing exposure to fintech, insurtech, regtech or Islamic fintechs.

A number of international businesses have signed onto the DIFC.

These include UK-based architect of digital banking and payment solutions company, Bankable, and global mobile payment technology company QFPay, which provides backend solutions to Alipay and Wepay.

For many institutions external to the UAE, partnerships are the best way to enter the region's industry.

Mastercard, for example, announced its partnership in September 2019 with the Dubai Roads and Transport Authority (RTA) that would see the two companies collaborate to enhance public transport inline with Dubai’s Smart City Vision.
 

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Jun 10, 2021

FIVE things fintechs must do to keep investors onboard

Fintech
Investment
venturecapital
AI
Brandon Rembe, CPO, Envestnet...
4 min
Fintech innovations drew in first-time investors who reshaped the markets. What new advancements will help them continue their rise?

New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.

Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?

The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.

Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.

Equal access to financial wellness education

Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.

The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.

More personalisation

Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.

For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.

Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.

The rise of AI-Powered Advice

Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?

Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs. 

Focus on financial mental health

New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.

It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.

Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.

Gamification for good

The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.

Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.

Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.

The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.

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