Last year, financial technology (fintech) finally went mainstream. Here are some examples that underline my case.
Exhibit one: stockmarket indices. AI-focused equity indices had a superb 2023. Investment group WisdomTree, for instance, has an AI-focused exchange-traded fund (ETF) tracking a specialised index. In 2023 it rose by almost 50%. But the fintech news website AltFi runs a similar stockmarket index for global fintech firms. It gained nearly 60% last year.
Then there is exhibit two: AltFi runs an annual awards ceremony for the most innovative fintech companies. Can you guess which provider won the award for the best digital bank in 2023? Chase UK ( a brand also known as JPMorgan Chase) which happens to be one of the world’s largest banks and a late convert to the potential of fintech. Its digital banking app Chase has been an enormous success and is giving the likes of Revolut, Monzo, and Starling a run for their money.
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Exhibit three: buy now, pay later (BNPL). Wander around the high street in my small Hampshire town and you’ll see a new sticker plastered on most cash tills proclaiming that you can space out your payments using a BNPL app. The remorseless rise of BNPL has even attracted the attention of regulators worried about the rise of short-term debt among younger customers.
If fintech is going mainstream and everyone and their aunt now has a digital banking app of some kind – not to mention the long list of digital savings platforms that have hoovered up cash deposits – what’s left to innovate with, in the coming year? I would keep a watchful eye on the credit card subsector. New products such as the Curve app are emerging, heavily influenced by the BNPL movement, alongside more rewards-based ideas.
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