Five Predictions for Financial Technology in 2016

2015 brought with it a financial technology movement that has seen incredible developments in how we interact with finance; the way we perceive it, the way we access it, the way we invest it, and the role it plays in our daily lives.

While Voleo continues to work towards removing the barriers traditionally seen in investing, fintech as a whole is propelling towards innovation and collaboration like never before.

So, what does this mean for 2016? As fintech takes bigger steps in evolving the way we manage our money, it moves into the global spotlight and we in turn are going to see exciting disruption on an unprecedented scale. Here are my predictions for fintech in 2016:

1. Canadian banks are strong, but if they remain indifferent about partnership with fintech companies, they will miss out on valuable opportunities to improve customer experience which will have an increasing negative impact on retention. We are seeing Canadian startups looking internationally to find champions for the latest technologies and if this continues, the Big Five here in Canada will lag behind.  

2. Globally, there is a massive willingness from major international banks to pilot and adopt fintech platforms. We are seeing big tech companies exceed the market caps of big banks, so the latter are keen to see how collaboration with startups can benefit both parties. Indeed, in a competitive environment the banks can clearly sense how much they have to lose if they were to ignore customer experience.

3. Exciting competition from new entrants in the robo-advisor space forces consolidation in Canada’s small market.  In 2016, we will see fragmented players continue to fall behind as effective partnerships grow, along with game changing mergers and acquisitions that will drive further innovation.

4. The majority of fintech focus is currently in big data, payments and alternative lending. However, I’m predicting that this will start to shift in 2016. Growth will undoubtedly move into disrupting the way in which we take deposits, manage investments and provide insurance. The only question is how quickly?

5. Speaking of shifting focus, wealth transfer is becoming a common theme in the space as our boomer population ages. While much of this (especially in the GTA and Vancouver) is solidified in physical assets like real estate, there is a massive – and untapped – financial component that fintech is keen to explore. As aging generations start to pass along their wealth, innovative tools will begin to emerge. I expect that to happen as early as this year.

Investing is going to continue to evolve. Whether it’s with the convenience of a robo-advisor, or the collective expertise of shared knowledge as Voleo enables, investing will become increasingly more accessible to a larger audience, and in turn a more mainstream practice for Canadians.