The Juniper Research report — Fintech Futures: Leading Innovators, Segment Analysis & Regional Readiness 2019-2024 — found that technologies such as machine learning, Big Data analytics and blockchain would be the cornerstone of fintech platforms.
And such technologies would make new use cases mainstream, including smart contracts, loan underwriting using AI to analyse non-traditional data sources, and personalised insurance policies based on IoT-generated data, the report says.
According to the Juniper research, in light of rising customer acceptance of digital platforms for financial services, traditional players are responding rapidly – and incumbents are attempting to replicate the fintech firms’ offerings, for example with digital banking offshoots (Marcus from Goldman Sachs) or new services (HSBC’s Wealth Compass).
“Where incumbents cannot replicate the fintech platforms, they are partnering with fintechs,” Juniper said.
“For example, Austrian banking group Bawag is using Spotcap’s lending-as-a-service platform to support SME lending. However, the research claimed that the challenge would be to integrate these partnerships in a seamless way, keeping friction low and maintaining control of the overall customer journey.”
And as explained by research author Michael Larner, “The distinction between the fintech suppliers and traditional incumbents will blur in the 2020s, digital engagement will become the norm”.
“The winners will be those that provide personalisation allied to an outstanding customer experience,” he observed.
Meanwhile, the research found that heavy regulatory burdens imposed on financial institutions after the 2008 financial crisis also meant that direct entry, beyond partnerships, remained unlikely in the medium term for even large technology companies.