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The global reach of finance is undeniable. Around 15 billion shares of stock are traded every day, while 100 million credit card transactions occur daily. The incredible capacity of global monetary networks is only made possible by evolving, innovative technologies that connect parties around the world and create never-before-seen financial instruments.
As finance and technology continue to coalesce, the rise of new asset classes is set to change the industry forever. Not only are new alternative asset products being offered as a result of technology, the invest-tech platforms that make them possible have already altered the way ESG and impact investing is done.
Innovation across the financial sector
The extensive impacts of fintech can be felt across every financial sector. A majority of executives in the field agreed consumer banking would be the industry most likely to be upended by technology. As three out of every four Americans now use their bank’s mobile app to meet their everyday banking needs, the number of visits to physical banks has dropped 36% over the past five years. The way people pay for things has forever changed as well. Taking an interest in more convenient forms of payment, over two billion people around the world now use e-wallets while the trend of contactless payments appears to now be the preferred way of transacting.
Leveraging technology, fintech lenders now have access to data acquisition and analytic techniques that process loans in as little as 24 hours. This speed and convenience have allowed fintech companies to collectively gain a double-digit market share in the mortgage lending industry.
Investors have also begun to feel fintech’s impact. Many in wealth management are finding that technology is a necessary part of business strategy. However, with three out of every four people preferring self-servicing technology, the way people invest is currently evolving. New investors are three times more likely to rely on invest-tech mobile platforms, and millions of Americans downloaded trading mobile apps just during January 2021. Although online trading has been around since the 1980s, technology has only recently allowed investors to access different markets through improved trading infrastructures. This growth in invest-tech is democratizing and educating investors through opportunities never before thought possible.
At the core of all of these changes are digital platforms. These online all-in-one solutions have reinvented the business model by connecting customers and businesses in a digital community. Largely driven by the digital demands of the pandemic, substantially more companies are interacting with their clients online. As business activity continues to shift to these extended ecosystems, it’s estimated that 75% of businesses will leverage digital platforms and use them to adapt to new markets by 2025. This technology is especially critical to alternative investment companies striving to improve transparency, communication with clients and the way clients engage with their investments.