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Money: it’s part of our everyday lives whether we are charging, spending, saving or tracking it. And things are changing.
The merging of finance and technology is transforming the very foundation of how we think about and use money. Big innovations are following close behind the incremental digitization that we have become familiar with so far.
Here is a look at some of the larger shifts taking place in how we spend, save and track our money.
Open Banking
Open banking is the biggest revolution in FinTech that many have never heard about. This new approach to banking allows consumers to share their financial data, including transaction history, with third party providers.
While that might not sound like the most groundbreaking development, it opens the door for consumers to work with other service providers to analyze and improve their spending habits.
Traditionally, banks have staunchly protected financial data. Open banking puts more of the power in the hands of the consumers, giving individuals more control over how they manage their money.
This opens the door for FinTech startups like Chip and Squirrel that aim to help people create — and stick to — a budget.
For enterprise level businesses, now is the time to seek out partnerships with FinTech startups that are working to capitalize on open banking and invest in the next banking revolution.
See how Bank of America uses open banking with commercial and corporate clients
Frictionless Payments
In recent years, mobile and digital banking has changed the way we make purchases, deposit checks and pay bills.
Having to make a weekly trip to the bank is a thing of the past and the impact of frictionless payments is growing still, with two thirds of Americans turning to digital banking as their primary financial management tool.
This means that large businesses are looking for ways to make shopping and payments more frictionless than ever. For retail locations, this could mean the end of traditional point-of-sale registers and a future where customers authenticate their identity and are automatically charged for their purchases when they exit the store.
With consumer goods enterprises like Apple and Samsung pushing innovations in mobile payments, and Amazon and its competitors giving rise to checkout-free shopping experience, waiting in line, swiping cards and signing receipts may soon become retail history.
International Money Transfers
In the past, the sending money internationally wasn’t just inconvenient, it slowed the pace of business and made it difficult to operate on a global level. Today, it has never been easier to send money, handle payroll for for contractors and employees in different countries or buy and sell products online.
When PayPal and other payment processors handle the exchange of foreign currencies, businesses can easily and affordably accept currencies from all over the world and expand their reach.
Looking to the future, online and mobile payment services will continue to make international money transfers faster and safer. This is good news for both startup and enterprise businesses that want to find new markets and customers outside their home country.
Blockchain Technology
Whenever a new FinTech tool is introduced, consumers and industry experts alike begin to question whether it is capable of protecting sensitive
personal information.
Blockchain technology, which decentralizes banking and relies on a distributed ledger is offering unprecedented protection for every transaction. This technology is empowering businesses to rely less on banks and allowing for the introduction of all sorts of innovative FinTech solutions.
At the moment blockchain technology hasn’t been implemented on a large scale, but major brands, such as Jaguar Land Rover, JetBlue and Verizon have all recently acquired blockchain startups and are looking forward to running some proof-of-concepts.
The Future of Finance
It is an exciting time in the financial industry and we appear to be right on the cusp of some major changes that will not only affect how enterprises do business, but how every individual spends, tracks and saves their money.
For more on how innovation is changing the business of and experience with finances, see our Technical Deep Dive: Finance.
