Paying for products and services via mobiles is a growing industry and the convenience of making payments wherever you are connected on your device is on the rise.
By 2019, we can expect global mobile payment revenue to surpass $1tr which is more than double the amount this new payment sector was worth in 2015.
As our world becomes increasingly cashless, connected, and smartphone reliant, legacy banks are looking to keep up and adapt to this next chapter in financial history.
Today, there is no doubt that for many of us, our mobiles have become our banks. So, what’s next for fintech and this new mobile money space? According to experts the whole concept of banks as we now know them is set to fundamentally change.
According to industry experts, disruptive innovations currently will focus on adoption of blockchain-based technologies, making international instant payments a reality, and ensure that the security of transactions is paramount.
There are many questions in the world of payment technology at the moment. It remains to be seen if retail and online payments will split in two, or they will merge together to form a new kind of payment solution.
There will also be concerns about how payment data will be used, and who will benefit from and monetize all the data. There is also the possibility of national digital currencies being launched.
However, it is not clear who is going to launch it first, and when this is likely to be. While payments will continue to see disruptive growth, the future is not very bright for payment intermediaries.
Deltec Bank, “Consumers and merchants will certainly benefit from distributed ledger-based tech such as blockchain and the insurance sector will also become involved in the disruptive payment world in order to keep relevant.“
According to recent research from PWC, almost a quarter (22%) of insurance, asset and wealth management business is likely to be at risk of disruption from FinTech’s.
Almost three-quarters of insurance leaders surveyed in the survey considered that insurance would be the most disrupted industry.
The financial world is also likely to get more fragmented, according to a Deloitte white paper
While customers are looking at being able to enjoy bespoke experiences aimed at them as individuals.
However, the research from Deloitte also warns that disruptive changes to payments and increased fragmentation will result in customers losing track of their spending.
“Almost three-quarters of insurance leaders surveyed in the survey considered that insurance would be the most disrupted industry”.
Some key points of how payments are likely to be disrupted
Experts in the financial industry, Deloitte are predicting this number of ways in which we are likely to see change and disruption and how the global payment industry is set to change.
- Payments are no longer limited by cash and will move to digital channels
- Increased competition within payments businesses
- Compliance and meeting market expectations will be very important.
- Security and data privacy will be of paramount important
- Businesses are under increasing pressure from regulators
- Blockchain will continue to influence FinTech in many different ways
And finally, …
With the advancement of the above new innovative technical advancement, banks will need to adapt to ensure they remain relevant and competitive in the digital age.
According to a recent report by MarketsandMarkets, the global digital payments market is set to be worth $86.76bn by 2023, which is a massive increase from $38bn in 2018.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.