Creation of a competitive and secure landscape of the digital financial market, acceleration of its high-tech development, as well as the transition to next-generation financial services based on new technologies. According to the research results of the international consulting company Accenture, such areas of fintech are considered to be the priority players of the financial market.

New trends are supplanting the current models of conventional market members. In particular, in the struggle for the attention of customers, banks move outside the industry becoming ecosystem players. Some companies find their own way by focusing on individual solutions and becoming digital monsters. Others blur away from plain sight, become suppliers of fintech products offering various services to the players.

At the same time, operators of open platforms are developing as aggregators of financial products and services. Unlike ecosystem players, they provide partners with access to the platform without distributing their own products.

Main directions

According to the results of the research, three macro-scenarios are identified in the current situation.

1. Value shift. Moving to digital platforms and large non-financial environments, where traditional financial players have a limited role as financial service suppliers (as in China with the dominance of BigTech companies).

2. Market openness. New financial services and ways of doing business are increasing competition in the marketplace. Thanks to the introduction of Open Banking and PSD2, the UK and European countries are following this path.
3. Market within an ecosystem (with a protectionist nature). The role of the largest financial companies is growing, they create and build their ecosystems (as, for example, in the markets of Australia and Canada).

Based on the results of the survey, a list of priority areas for the development of financial technologies was also formed.

• Security – effective interaction mechanisms and tools to counter cyber threats and fraud in the financial market;
• Quantum cryptography technologies;
• Data access mechanisms – general data access mechanisms and new opportunities for using data as a tool for developing healthy competition and building new business models;
• Financial literacy in the digital world – joint programs to develop digital and financial literacy, more informed financial behavior, and increase trust in the financial market;
• End–to–end digitalization – a full range of financial services and digital transactions;
• Development of the payment environment – the development of convenient, transparent and understandable, fast and secure digital payment services based on an efficient and reliable payment infrastructure;
• Environment for the development of fintech innovations – a holistic fintech ecosystem that provides effective support for the innovation cycle;
• Freedom of choice – opportunities for consumers to freely choose financial products and simply switch between service providers;
• Invisible finance – opportunities for easy and seamless integration of various financial services into the business of players from other industries (financial services as a service model);
• Cloud services – opportunities for financial players to use high–tech commercial B2B solutions, including secure public cloud services for financial institutions.
• Blockchain technologies – the general infrastructure of distributed ledger technologies as a design tool for the rapid creation of new industry solutions at the intersection of financial and non–financial markets;
• Development of competition and regulation of ecosystems – new rules of the game for the digital economy: regulation, standards, and norms at the intersection of industries, taking into account the development of digital platforms and closed ecosystems;
• Next–generation financial software development services – conditions and incentives for the use of breakthrough technologies, including artificial intelligence (AI) and machine learning (ML), Internet of things (IoT) technologies, etc. for the digitalization of customer interaction, the development of new high–tech services, algorithmic “smart products” and ethical financial management tools. Click on the link itexus.com to know more on fintech app development.

The three main segments of respondents whose opinions and priorities reflect the research results are banks, insurance companies, and other fintech. It is clear that fintech needs access to big data, which, as a rule, neither new companies, nor the bulk of banks, nor insurers possess. Telecom operators, Internet holdings, retailers, and very large banks have a lot of data. And the State. They are hastily expanding in all directions – operators are promoting their banks, the largest banks have opened MVNOs and are gaining an Internet audience, social networks are developing payment systems, etc.

Not surprisingly, the priority is given to access to data for everyone – that is, to take data from those who have it now and give access to those who do not. At the same time, we must not forget about the containment of ecosystems – consolidation in the hands of the largest players can be dangerous.

Hidden threat

Perhaps fintech can now provide a colossal volume of services, the side effects of which have not yet been studied. It’s not even about ensuring information security, but about the transformation of society under the influence of fintech tools. Without a smartphone, we are now helpless, and there are our wallets and smart assistants who are just waiting for the moment to start buying instead of us.

Katie O’Neill, in her book, Big Data Killer, writes extensively about the discrimination that arises from machine learning. It is worth being born in a disadvantaged area, living on a stairwell with people with a difficult fate, and going to an unimportant school, and the algorithm will draw, using the impersonal data that we have gained access to, an average portrait of the person whom this data describes. And it will not take long to convince that on average it will be an unimportant borrower. Especially if he likes friends on social networks who use bleak vocabulary when describing loan payments. Accordingly, a person turns out to be in some way a payer of debts for his environment. 

Therefore, the authorities and society are holding back fintech, otherwise, it would transform us faster than we are ready for it.

Conclusion

Many of the priorities outlined above contribute to stabilization and more predictable market development by coordinating efforts to apply new technologies across the entire market perimeter. This, in turn, will reduce the costs and risks of market participants through the common infrastructure, as well as create new growth points and conditions for the development of the fintech ecosystem in the world. Otherwise, the market will depend more on the genius of visionaries who lead the largest ecosystems, and not on us.

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