Fin-Tech and the Power of the Individual

The rise of fin-tech is one of those topics, like the advent of the driverless car, which has often seemed to promise more disruption in the future than is actually taking place at present. The fact that new technology is often advertised as having a revolutionary impact on a particular sector, when the truth is that change is almost always more incremental in nature, can prompt these slightly underwhelming evaluations. Any examinations of the latest statistics, however, helps to underline the degree to which fin-tech is, indeed, making noteworthy incursions into the financial sector.

The phrase ‘fin-tech’ covers a range of different factors, from crypto-currencies such as bitcoin to the use of artificial intelligence, mobile payments, blockchain technologies and much more. Amongst those statistics demonstrating the inroads fin-tech as a whole is making are the following:

  • In the first quarter of this year, Fin-Tech start-ups raised $2.7bn in Venture capital funding across 226 deals (Source: CBInsights Global Fin-Tech Report)
  • 30% of larger financial institutions are currently investing in Artificial Intelligence (Source: PwC Fin-Tech Report).
  • 77% of financial services expected to be adopting blockchain as part of their systems or processes by 2020 (Source: PwC Fin-Tech Report)

Perhaps the most noteworthy statistic comes from the PwC Fin-Tech Report, and relates to the degree to which Fin-Tech is expected to disrupt the industry in the immediate future. 82% of the North American respondents believed that their business was at risk from Fin-Tech disruption, a figure which has risen dramatically from the 69% recorded in 2016. When the people in charge of running the industry regard a factor as being a significant risk to their business model, then it can be safely assumed that this risk is real and that steps will be taken to deal with it, the most likely of which are the absorption of Fin-Tech into established institutions.

One area in which Fin-Tech has almost certainly played a role is the expansion of the global Forex market. The exact amount traded every day on the Forex markets is a figure which is notoriously difficult to pin down. Some sources have given $5.3 trillion as the amount, but others have questioned whether this figure is swollen by the inclusion of double counting and internal bank trades. Taking these out of the calculations reduces the figure to something nearer $3 trillion, which is still an impressively large sum. The growth of the Forex markets has doubtless been stimulated by the fact that they have become more diverse and accessible in recent years, and Fin-Tech has played a part in this expansion.

Leaving aside the raw data on amounts of cash traded, the facts of the matter are that the number of traders and orders has increased, and this can be put down to the way in which Fin-Tech has broken down the barriers preventing individuals from accessing the forex markets. In the past, the complex and constantly shifting nature of the forex markets placed them beyond the reach of traders who lacked the experience and resources needed to successfully ‘play’ them. Online trading platforms and mobile apps have changed all of this, and the nature of tech disruptions in general means that those tools which are available today will evolve and adapt to the demands of individuals and the market in a fluid and responsive manner. The data collected by such tools will also help to level the playing field upon which individuals and larger institutions are both operating. Fin-tech will allow anyone with the ability to interpret and make use of this data to enter the market place with at least a cautious expectation of success. Whilst the larger institutions will, as is their wont, seek to co-opt the power of Fin-Tech to further their own aims, the chances are that the high water mark of individual participation via accessible technology is still some way in the future.


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