Fintech Experts at Slush Share Their View on Future Innovations
Mash goes Slush
Fintech is a field constantly influenced and shaped by major innovations, the full implications of which we haven’t seen yet: blockchain, cryptocurrencies, artificial intelligence, the ever-growing ability to process and analyze more and more data. All our lives will be shaped by them in one way or the other.
So which of these innovations will cause the biggest shifts and disruptions in fintech - and in our world in general? We took the opportunity at Slush to fire these questions at some fintech experts.
Fintech Innovations Shape Your Future, Whether You Want It or Not
Fito Benitez is the Head of Marketing at Heatledger, a blockchain fintech start-up. He firmly believes blockchain is the technology that will make the most waves and offer a huge competitive edge to those who can seize it.
“It is a transfoundational tech with the capacity to untangle the massive mess of intermediaries that currently make transactions trustworthy, but also slow, expensive and sometimes insecure”, Benitez explains. “The current centralized architectures have evolved as a way to solve this growing mess. Distributed ledger technologies like blockchain have the potential to make existing business models obsolete.”
The Lead Enterprise Architect of the Finnish IT and software giant Tieto, Matti Timonen, doesn’t want to choose one innovation over all others. “So many of the technologies have huge momentum right now and will impact the whole fintech field.”
In Timonen’s mind it all comes down to being able to manage the amount of data that we have; how do we analyze and use it. He thinks machine learning will become commonplace. More importantly, it will become a part of the work of every team.
“You have to understand both your customer and your data. The change will happen gradually. You won’t just wake up one day to notice that the world has changed. Multiple small projects are driving the change constantly”, Timonen says.
Whether it’s blockchain or some other technology that shifts the landscape, the big question is also how it will actually happen. Marko Maunula, CTO at Aico Group, sees that the big change will take place in payment transactions and especially in their speed.
“Transactions will start happening in real time. That leads to the question: who will manage the trust between two parties?”
Maunula says we’ve not yet seen the big shift but some signs are already there – and he, unlike Timonen, thinks when the change starts, it will likely happen fast. And when he says fast, he means really fast.
“The traditional structures and the old architecture are expensive to uphold and we’ve put a lot of money into them already. The question is, when are we going to cross that bridge and start investing heavily in new technologies?” Maunula asks.
“And then, what you have to remember is that computing capacity, when it grows, it does so exponentially. What we are now seeing as impossible to implement because of limitations in that capacity - well, in two or four years those limitations might just be gone. The things we are seeing these days are because of the huge growth in capacity - it has allowed us to accomplish things we spent the last 25 years just dreaming of.
Who Shapes The Future?
We were also curious to hear views on who will first and foremost drive the future innovations: will it be the current tech giants like Amazon or Google, or are we going to see new challengers appear.
Both Benitez and Maunula felt that the tech giants have the resources but might struggle with their innovation process: in a huge company, it might be a challenge in itself to control the innovation process.
“When it comes to blockchain enabled solutions, I think that's especially an area where new players could make the FAANG (short for Facebook, Amazon, Apple, Netflix, and Google) boys struggle”, Benitez believes. “Currently most FAANG make a huge amount of money by selling user data. Under a blockchain model, data will belong to the user, and it is the user who could want to tokenize his or her data and sell it to the top buyer. That simple change would make FAANG’s business models tremble.”
“The strength of the small companies comes from their ability to recognize things that fall beyond the thinking of the large conglomerates”, Maunula describes what could be the way to challenge the top players. “The small companies see the world from a different angle.”
There are also opportunities for synergy. Timonen sees that small companies and start-ups can and should take advantage of the research that for example Microsoft and Google have made. It allows even for small start-up teams can gain access to some very advanced tools. “It’s in their own best interests to offer their services to smaller teams. This way they can make profit from the research.”
Will Automation Take People’s Jobs?
Huge innovations tend to bring major changes – and major changes usually cause a certain amount of fear and doubts in people. We also discussed if the innovations of tomorrow would revolutionize work and leave many out of a job, and what should we all understand about the coming disruptive technologies.
Maunula admits that work is changing and draws a comparison to the industrial revolution. When the first steam engines were invented, the need for human workforce in the mines fell; similar developments happened when production lines became automated. Nonetheless, his view is not pessimistic.
“I think society will still be based on work and activities that we just can’t see yet. It’s kind of like if in the early 90’s someone had asked you to imagine what a web designer does? It’s inevitable that the capabilities of technology will surpass the capabilities of human beings. But there’s no need to be afraid. We’ve had our share of dangerous and disruptive inventions throughout the history of humanity, and yet we’re still alive.”
Benitez is also hopeful about the change. He says that we need to be ready to reinvent ourselves professionally as the disruptive innovations shape how work is done; for example, AI might replace some tasks, leading to certain jobs disappearing, but it will also create new competitive edges and enable new jobs to come about.
Mattila shares the same view. “Certain jobs will disappear due to automation for sure. How we react to this as a society, that’s the question that matters. In my opinion, everyone should come together to make sure that the changes will be implemented in the proper way. Automating basic tasks will free people to do the things they actually want to do. This is how I see it.”
Benitez encourages us to face and embrace the change, not try to hide from it or deny it.
“The sooner we can turn fear into excitement, threats into opportunities, the greater chance we will have to embrace, learn, adapt, and make the best out of it.”
P.S. Read also what it would take to work in a fintech company.