Last year proved to be another exciting ride on the FinTech rollercoaster.
We reached out to over 30 experts from leading brands including Ant Financial, Citi, Ripple, Santander, Starling Bank, Visa and Western Union to share their insights on the biggest fads of 2017, lift the lid on their biggest fears, and unveil the most exciting opportunities for 2018.
Our contributors identified Initial Coin Offerings (ICOs) as the most over-hyped trend of 2017, closely followed by Bitcoin. However, despite the undeniable hype around cryptocurrencies during the past year, many experts predicted there could be a future for both ICOs and Bitcoin with the right regulation in place.
Meanwhile, Blockchain – and the distributed ledger behind it – were identified as major opportunities, alongside Artificial Intelligence (AI). This is despite respondents being largely in agreement that the expectations of what AI could achieve in 2017 were often overhyped.
In addition, 85% of respondents believe that Open Banking – including the introduction of Payment Services Directive Two (PSD2) in Europe – will be the most important development for the FinTech industry in 2018, enabling better collaboration between traditional Financial Services and FinTechs.
However, many respondents also recognize that complying with new regulation, including PSD2 and the General Data Protection Regulation (GDPR) will pose one of the biggest challenges of the year.
Finally, our experts revealed that the major challenge FinTech startups in the next 12 months will be reaching profitability – and giving investors real returns on their investments.
What’s interesting is that our experts identified that an overhyped fad and the future of finance are not necessarily mutually exclusive. Take artificial intelligence (AI) for example – even a number of AI providers we spoke to admit that the technology was hugely overhyped in 2017. That’s not to say that AI won’t completely alter the financial services industry in the future, but likely in a more measured way.
Our experts recognise that there is a fineline between being excited about the future of finance, and over-hyping its potential. Customers of Financial Services, whether consumers or other businesses, are increasingly able to see through overly exaggerated claims and are crying out for rhetoric based in realism. As such, authenticity in communications will be more important as ever for the sector in 2018 and beyond.
We’d love to hear your thoughts – the insights within our report are taken from a snapshot in time and even as we publish, events are changing. Get involved in the conversation in real-time using the hashtag #FHFinTech2018.
Claudia Bate, Head of FinTech & Financial Services