Fidor’s VP of European expansion Sophie Guibaud outlines her fintech vision for 2018.
Among other things, Guibaud expects a greater push towards a global cashless society, with Blockchain at its heart, and RegTech to come into its own as we approach the launches of PSD2, MiFID II and GDPR in the coming year.
Anticipating a further acceleration to cashless payments, Guibaud said: “This profound shift in how people pay for goods and services will have an effect on the rise in Blockchain adoption. As all money can more easily be traced to its rightful owner and beyond government’s control, Bitcoin will also continue to rise in popularity and also valuation.
“Thanks to PSD2, banking as a whole will become much more personalised. The simple fact is that data is now as valuable as gold to financial organisations, and they need to treat it as such.”
As a result, Guibaud expects 2018 to be the year when RegTech really takes off, particularly in light of financial organisations needing to become compliant with many new European regulations under MiFID II and GDPR.
“Due to the need to be fully compliant with these new rules, financial organisations will be looking at immediate options to help them decrease their regulatory risk and costs, while also improving the customer experience next year.
“The new regulations will, in future, have a huge effect as financial organisations’ relationships with regulators will rely upon real time data to be shared to improve and speed up risk management and market stability, all through the power of APIs.”
In fact, upcoming Open Banking API regulations have already been capitalised upon by many in the fintech space, as the rise of Banking as a Service (BaaS), AI-based consumer products and in-house Marketplaces increases in popularity with challenger banks. Starling Bank, as an example, have made several recent partnerships with fintechs on their Open API framework, and were recently granted permission to offer a wide range of financial services products in-app.
“We’ll see an increasing number of companies competing to provide ‘white label’ banking products to organisations struggling to keep up with the digital revolution. In tandem, banking marketplaces, which offer consumers a host of different financial products will be a natural by-product of this,” said Guibaud.
They offer banks a huge opportunity to remain relevant and remain the main contact for consumers in terms of their financial needs as marketplaces will have all the financial products that a consumer could want, all in one place.”
In addition, despite the number of small business loan applications in the UK falling this year, Guibaud remains confident that competition will heat up in the European SME market in 2018.
“Due to the challenging environment that European SMEs will find themselves in next year, we’ll likely see more players enter this market, which already picked up since last year, especially from new innovative fintech companies.
“With more players on the market, it will also become the time to find the right business models for those players, those being potentially different across geographies.”
2018 will certainly be an interesting year for alternative finance, as European legislation tries to catch up to innovation. Although one can always expect some inevitable hiccups in the early days as firms race towards compliance, here’s hoping the new year will hold some exciting new products and services in store for consumers as a result.