future of fintech

Innovation in industries happens by either outsiders or insiders. Whereas in the fintech industry, outsiders have rarely came in and solved problems like lending, advising, and payments. The innovation has been left to industry veterans with their specialized skills and connections to crack the toughest problems. We’ve seen these veterans pave the way for the industry for so long, till now.

Insiders succeeded because they understood:

Fortunately, open banking will erase the data hurdle. Open banking will spark a change and won’t give insiders a leg up with private data anymore. Open banking means that banks agree to share their data through APIs. Now that this data will be publicly available, institutions as well as developers can analyze the data to figure out what applications and services to make and how to make them more useful.

Now that small teams as well as big institutions are able to grasp the whole picture of consumers’ financial lives, innovation will take place on the customer experience front. Outsiders can look at the data, identify opportunities and then assemble a team with specific industry skills and knowledge. More people siftings through the data means there is less chances of someone missing a prime idea and then executing on it. The products with the best in-class features will survive, the others will be weeded out.

I believe that we’re heading in a better direction with open banking, which will ultimately open up access to all for future innovation in fintech. We will no longer see financial institutions offering a whole suite of products; instead, we will see various companies offering best-in-class products to consumers. Customers get to pick and choose which products they like most, they don’t have to commit to one companies products — it’ll be tailor made to their needs. Eventually, as more countries begin adopting open banking, consumers should expect a new wave of revolutionary best-in-class financial experiences.

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