Initially, fintech referred to technology that was applied to the back-end systems of banks or other financial institutions – but has since grown to encompass a plethora of other applications that are more consumer-focused. In 2020, it is possible to manage funds, trade stocks, pay for food or manage insurance through this technology (and often on your smartphone).
For the estimated near 2bn people worldwide without bank accounts, fintech provides a nimble option to participate in financial services without the need for bricks-and-mortar. And, to a large extent, that is precisely what fintech has been developed to do – give consumers direct access to their financial lives through easy-to-use technology.
What is clear is that fintech is disrupting the global financial services industry. Think of any old school way of doing things from banking to stockbroking to insurance and there are companies using technology and increasingly artificial intelligence to disrupt these old industries and give us better, simpler, cheaper ways of carrying out tasks that are a vital part of our lives.
These are huge industries with trillions of dollars at stake. It is still early days in this transformation but it is already creating businesses that I believe are going to become behemoths in the future. I look at four examples below which are already in the QV portfolio but where I think the best is still to come.