In the Fintech Fast Five, we ask industry insiders five of the pressing questions facing the sector. In the firing line this week is Cybertonica…
What fintech will have the biggest impact in 2019, and why?
Sergey Velts, CTO and Co-Founder of Cybertonica: The impact of fintech innovations are often determined by changes in regulation and infrastructure readiness for new business models. I expect 2019 to be the year of PSD2, NFC payments and Open APIs. Many startups try to work around existing limitations doing parsing/crawling of other sites, OpenAPIs and PSD2 will change it.
Olaf Hofmann, Chief Product Officer and Co-Founder of Cybertonica: PSD2 and open banking – there will we be huge wave of applications that use the open banking API to provide specific functionality a large organisation can’t provide profitable enough. Though with this new wave of emerging products providing financial services there will be fraud and misconduct on the increase.
How can you encourage the mass adoption of Fintech?
Sergey Velts: From my point of view fintech does not have its own internal value. Just as banking is not valuable itself, it’s just a tool/infrastructure for real economy and it should serve people/companies’ needs. At the same time people need time to get used to new services and technologies, finance is about trust. At least it’s true for older people, new generation adopts new services faster. Can we make Fintech even faster? It’s already very fast. 5 year ago, people still visited branches, had cards without chips. Today we have virtual cards in Apple Pay.
Olaf Hofmann: I don’t think there is any encouraging required considering that nearly everyone is part of the financial system one or the other way. What will change is the way we interact with the financial system. A child born in 2018 will grow up with voice-controlled appliances, touch screens and driverless cars for them the idea that they require to set rules around their investments, or not having information available real-time on any device is just un-thinkable. Is this required to happen all in 2019? No, but we will see the early stages of AI/ML investment advisors instead of robot advisor that take care of personal investments pro-active to maximise gains while minimising risk based on the persons behaviour and predicted future behaviour.
Are legacy institutions agile enough to keep pace with changing demands/innovations?
Sergey Velts: They are not but they have market power and money to acquire successful startups and integrate them into their business to foster their digital transformation.
Is personal finance going to be 100% digitised and, if so, when?
Sergey Velts: It’s hard to predict. There is a trend that some people, especially when we talk about big money, do not trust digital services because of security/confidentiality issues.
Olaf Hofmann: This is already possible though as not everyone is comfortable without seeing a branch or a person this will take time and will shift gradually. In the later stages it will become a premium feature to be able to visit a branch and discuss financial matters.
How can companies and institutions encourage financial inclusion and education?
Olaf Hofmann: Is financial inclusion and education necessary? With the increasing digitalisation and optimisation financial advice and services will ultimately become a commodity. It will lead to the democratisation of the financial world.