Lists: This is how CIOs will be hoping fintech develops in 2016.
Fintech is likely to be one of the tech succes stories of 2016, with the industry growing all the time. Here are 10 things CIO’s will be hoping for in the indsutry over the 12 months to come.
1. Development of strong relationships with the banks
Fintech started off as an antagonist, a disrupter of established financial industries. Now though, many fintech firms are working with the big banks, with some building incubators and development environments within their firms. A strong relationship is to the benefit of both both parties. The banks get cutting edge technology, and the fintech firms get support and credibility by being associated with major institutions. All this helps the customers that use them too be provided with a more robust and wider range of services.
2. Better security
2015 is the year many of the public became aware of the threats that exist in cyber space. The issues are particularly pertinent in fintech, when people’s money is at stake. Customers need reassuring that their payments and other transactions are being conducted safety, so better security, particularly in mobile, is fundamental to the development of fintech. Part of this will be the greater deployment of biometric technology on mobile devices, which improves their security, and will make firms feel much safer deploying fintech solutions.
3. Blockchain development
It is blockchain, not bitcoin, which is causing the real excitement in the financial industry. The distributed ledger technology that helps secure and authenticate transactions is being increasingly invested in by financial institutions, and CIO’s in the fintech sector will be hoping it develops further to provide further opportunities for the whole indsutry. CIO’s using fintech tools will also benefit from the authentication and ledger capabilities offered by blockchain technology, helping them keep track of transactions.
4. Continuing Government backing
UK politicians have started recognising the power of fintech, with David Cameron and Boris Johnson taking fintech firms onto trade missions, and Eileen Burbidge being named as a London’s fintech envoy. Those in the industry will hoping that this is not a flash in the pan, and that fintech continues to receive government support to help it grow and offer a wider range of solutions in 2016.
5. Wider public recognition
While the tech world, particularly in London, might be buzzing with talk of exciting fintech firms, many people do not really know much about it. Fintech CIO’s need their technology and solutions to receive winder publication regonition, so they can develop and become not just a niche technology, but a core part of the financial system.
A key factor in the above is the lack of take up of mobile banking. A recent survey by ACI Worldwide found that 82% of people still do not even even use mobile payment services. This limits the amount of digital disruption that can be done to the financial sector, and CIO’s will be desperate for it to change in 2016.
6. Improved VC funding environment
There are some specialist funds putting money into fintech, but the venture capital environment needs to improve. Fintech firms need money behind them, particularly if they are offering credit or loans, but also they often need time to develop their technology. This requires some patience on the part of the investor which is not always present at the moment, with many investors still look to cash in and get a quick return.
7. Alter the regulatory burden
The financial industry in the last few years has been subject to regulation which many fintech firms, especially start-ups, find stifling. While anti-money laundering and other provisions are essential, the cost of compliance can be huge, stopping new firms from developing.
However, in some areas, fintech firms want greater regulation. Many are concerned about the "wild west" of Bitcoin, fear users do not have to play to the same rules that they do.
8. IoT integration
We’ve already seen ApplePay work Apple Watch, but fintech leaders will need IoT integration across a range of devices as more of them become web connected. In the way Uber means you never have to worry about paying for a taxi with cash, watches, cars fridges and a range of other devices will need ways to link to payment systems.
9. Better analytics
CFO’s are finding it hard to get a clear picture of their firms, but so are CIOs. This is a critical issue in fintech, where up to date data is absolutely essential for people to constantly monitor financial and other data coming in and out of their firms to improve the services they are offering to customers. Customers too want to be able to have clear data regarding their financial transactions, which is boosted by better analytics.
Tradtional financial instituions are often criticised for being opaque and misleading. Whether it’s payments, transfers or loans, fintech services have to be transparant in order to be gain trust. CIO’s will use these solutions if they can show clearly they save money, or help the firm better analyse where it’s money is going.