- Fintech has impacted the financial sector positively
- Even amidst turbulence and recent downturns, Fintech companies continue to receive attention
- Time is ripe for introspection and maturity
The term Fintech is on everyone’s lips and a portmanteau of Financial Technology is all over the place; from banking apps, credit scoring, and internet payment and, of course, cryptocurrencies. Besides being a convergence of the finance and technology sectors, the technology has impacted the services and infrastructure that define the financial sector.
The time is ripe
James Cooper, a law Professor at the California Western School of Law in San Diego, who is also a keynote speaker at the Blockshow during Singapore Blockchain Week, has surmised that after the rough ride, it’s time Fintech to make the big breakthrough, and every stakeholder should prepare to get a role.
Besides losing close to $700 billion in value and occasioning losses to investors, the industry has had its share of hordes of fraudulent Initial Coin Offerings (ICOs), spectacular hacking incidents the lead to the loss of millions in digital assets and “disappointing rollouts” of the Distributed Ledger Technology. Cooper explains:
“Such a downturn was to be expected. The signs of “irrational exuberance” were evident – the hype of Bitcoin’s value topping US$20,000, everyone promoting an initial coin offering, and senseless investing in any project that had the word “blockchain” in it.”
According to Cooper, even regulators are almost always playing “catch up” and have therefore been unable, in most cases, to protect consumers from duplicitous investment schemes related to this technological advances.
Saying Fintech is receiving a lot of attention and huge financial investments; the CEO of the Gibraltar Blockchain Exchange Nick Cowan has compared its significance to the advent of the internet in 1990s. He stated:
“Fintech is at the very start of an amazing 20-year cycle.”
The emerging digital technologies are in the process of reshaping the value proposition of existing financial products and services. Consumer banking and payments, already on the disruption radar, will be the most exposed in the near future, followed by insurance and asset management. Natalia Mileshkina, Partner, Financial Services Assurance and x-LoS Leader, PwC Russia says:
“The introduction of new banking technologies will have a significant impact on the financial services sector in the coming years.”
James believes that if governments would take the opportunity to provide regulatory guidelines in crypto world, major players should be able to come in and collaborate to create the best industry practices. Even with Bitcoin’s value sliding towards the $4,000 mark, there is increased appetite for the cryptocurrency. James concludes:
“The time is right for introspection and ripe for innovation. Singapore Blockchain Week is an apt time for the grownups of the industry to help move Fintech toward maturity.”