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Digital Alchemy. Human Experiences.

Fintech has often been the canary down the coalmine of technological advancement in business; after all, money makes the world go round, and finding new and efficient ways to do that is big business. Yet, despite the notion that fintech is groundbreaking and awe insiring, many household banking names have a lot to lose by not keeping up with their millennial Joneses. Let’s take a look at what is set to shape up the industry in the following year:

Increased collaboration between Startups and Corporates: the advent of PSD2 in the UK has seen marketplace banking services like Starling Bank take prominence in the lives of customers who are traditional bank agnostic and yearn for more customized and personalized solutions. Rather than innovate from within, more traditional institutions are outsourcing their innovation to smaller startups that have narrowly defined missions and can execute on those more effectively. In 2020 we should expect to see loads more M&A activity in the space alongside acquihires of seed-funded businesses that are ready to scale.

Not business as usual: speaking of traditional financial services businesses, the table of leading banks is going to change drastically over the coming years. Names like Lloyds, HSBC and Santander are going to be replaced by the likes of Monzo, Revolut and Starling which are using APIs to tap into readily available customer information in order to provide customization and personalization at scale. These new banks target what your customers really want, get to understand them and use that understanding to market better as well as create better products and services.

At the heart of this upheaval is a step change in customer experience whereby Rapid Process Automation (RPA) is being used to complete menial and repeatable tasks like performing rules-based tasks, merging databases and data entry. A process like KYC that would take a human 5 minutes to do is done in seconds via RPA which is system agnostic and merely taps into an API.

Some traditional banking systems hark back to the 1970’s and when compared to best-in-class platforms like Thought Machine’s banking operating system characterized by modular system design, cloud computing and API management, fall horribly short.

AI and Cybersecurity will come to the fore: The hot acronym on everyone’s lips is AI and whilst we haven’t seen a fintech terminator rise from the ashes, we’ve seen use-cases range from personalized client communication to speech to text transcription and analysis. Machine learning is allowing institutions to create enormous and personalised depth in their customer base as well as anticipate what the customer is going to do next. In terms of security, banks are constantly fending off attacks that are meant to cause the loss of valuable customer data which is meant to erode confidence in the institution. According to the UK’s Financial Conduct Authority, In the last four years, the number of these attacks has increased by 10x. Perhaps an advantage that traditional institutions have is that they have had time to put measures in place to deal with these and when dealing with a new incumbent, it’s advisable to check their security measures.

The Gig Economy comes to Fintech: The on-demand economy is here to stay and for many this means having jobs that are as flexible as they want to be. The rise of freelancer platforms  has led to the advent of on-demand fintech and insurtech services aimed at catering for this economy. Cuvva insures items by the hour so that when that item is not exposed to risk, it doesn’t need to be insured. Shepper is taking this one step further and is providing gig economy workers to businesses that need their assets physically checked for insurance purposes.

If we consider that fintech companies often lead the way for other tech verticals to follow, think about how you can apply these principles in your own vertical to innovate. Our golden rule is that greater understanding of customers and their experiences lead to greater products and services – so make an effort to understand your customer and then employ some of these innovative moves in your vertical.

Are you thinking of digitally innovating? Want to look at how we can help you help your customers?

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