How FinTech Will Change Your Life
By Rob Waugh
‘Would you like to see it one more time? You may have blinked and missed it,’ said Apple’s Tim Cook when he launched Apple Pay — and the whole financial technology business is moving so quickly it’s all too easy to blink and ‘miss it’.
Suddenly, trying to pay in cash in a pub is liable to get you a funny look from the bar staff — in much the same way as one might have done when trying to pay with a debit card ten years ago. The way we use money is changing very, very quickly indeed.
But how will this change affect your finances? Over the next five years, financial technology is going to affect everything from the way people do their accounts and pay their taxes, to the way people save and borrow money.
Analyst Price Waterhouse Cooper predicts, ‘By 2020, consumers will need banking services, but they may not turn to a bank to get them. The so-called sharing economy may have started with cars, taxis, and hotel rooms, but financial services will follow.’
With the average number of connected devices, per person, forecast to reach 9.5 by 2025, according to Cisco, the biggest change to people’s personal finances is liable to come in the form of apps, giving consumers direct access to information they don’t have today.
Changing regulations are contributing to this, with this year’s Open Banking (PSD2) requiring banks to now share their data to authorised third parties.
Naturally, Focus are ahead of the game. We designed our technology to be able to consume a wide data set with Open Banking in mind.
Apps will make it possible for small businesses to do their own accounts, for savers to automate putting away cash, and for customers to understand their own finances in ways that weren’t previously possible. It’ll also make it far easier to ‘shop around’ for better deals.
Increasingly, the way people communicate with banks and other institutions will be via ‘chatbots’, automated chat software which mimics the experience of talking to a human being. A Hubspot survey found that 48% of us would prefer this to any other way of communicating with businesses, including talking to actual human beings.
The speed and ease of such interactions will smooth out previously complicated processes such as applying for mortgages and other accounts.
It’s predicted that artificial intelligence will conduct 30% of corporate audits by 2025, with increasing numbers of self-employed people relying on apps to run their own businesses, too. AI will increasingly become capable of feats previously seen only in science fiction — ‘joining the dots’ to help people take control of their money.
AI will connect reliable tenants with landlords, lenders with borrowers, and will completely rewrite the landscape of how people’s credit scores work. Borrowing money in the 2020s will be a very different experience to today.
Technologies such as Blockchain will also revolutionise the way finance works — with a government somewhere in the world collecting taxes using the technology by 2023, Business Insider predicts. Blockchain will move out of the world of cryptocurrencies, and will enable easier, secure payments for individuals and institutions.
Dr Cathy Mulligan, research fellow at Imperial College Business School, says, ‘Blockchain has the potential to redefine how industry works. From banking to food supply chains, these solutions will change the manner in which companies interact with one another and in many cases how they interact with their customers.’
