Niels Bohr, a Nobel Prize winner, famously remarked that making forecasts, particularly about the future, is difficult.
IDS Fintech does not have a prophetic role, but we are attempting to foresee the requirements of the financial services ecosystem of the future. It is conceivable to pinpoint the megatrends that will fundamentally alter the way financial services are provided and the function of IDS Fintech by 2030 if we look out over the remaining seven years before the start of the next decade.
Two Worlds Come Together
Fintech has been present for almost 30 years, even though it may appear to be a recent notion. The initial wave of fintech emerged concurrently with the dot-com boom of the late 1990s when new technology opened doors for established businesses to provide their clients with distinctive digital experiences. Wells Fargo in the US and ING in Europe had introduced digital-only banking before the neobanks' meteoric development over the past ten years.
In 2010, the next phase of fintech was launched under the direction of a new group of creative thinkers free from the constraints of established technologies. Using solutions created to address a particular pain point, those digital natives compelled a decoupling of financial services. Due to rising competition between new competitors and established providers, solutions with more flexible pricing, more customizable features, and easier deployment were available.
We are now in a new era of fintech, one in which digital alternatives coexist with legacy technology, and service providers like IDS Fintech will act as a link between them both. A collaborative environment that enables businesses to leverage the potential of fintech and incorporate it into their offers will emerge as new approaches to integration come to the fore.
Age of Simplicity
Financial services are getting more and more complex. Banks, merchants, and investment firms share the unpleasant burden of connecting to an expanding range of funding flows, identification kinds, asset types, privacy needs, and engagement sites.
The world without any coding will replace the cloud-native and API-led era that began with the second chapter of fintech. Developer-less integration will become the new norm in which any business may connect to banking, payment, wealth, or lending services without specialized developers or technological resources. The removal of complexity will be the function of fintech, especially IDS Fintech. The emergence of "low-code-no-code" service providers will lower entry barriers for businesses in our industry, allowing innovation to shift its emphasis from technological to economic propositions.
A New Horizon
The boundaries of the financial services ecosystem are expanding far beyond just banking, lending, and investment, causing a tidal change. At the point of need, financial flows are becoming integrated into numerous businesses, including travel, healthcare, insurance, and many more. Incorporating technology into any setting or use case beneficial to the client will allow fintech and digitally agile banks to gain new market share.
Success will be based on offering contextual experiences, and every industry will need to create a future in which those services are tailored to satisfy the particular needs of their specific vertical. By developing simple technology and capabilities to integrate into the settings where customers are already active, fintech defines that future. Instead of services, banking, payments, and loans will evolve into interwoven experiences.
What will that mean in 2030? For instance, cutting-edge travel companies will provide their property hosts with a full range of banking and financial services entirely within their platforms. Manufacturers of electric vehicles might seek to add digital assets to the list of standard financing options available to their clients. Additionally, new telehealth services will require digital health providers to tokenize various data collected securely. All those services will need to be provided without ever leaving the customer's ecosystem, which can only be done by connecting to fintech once.
Reducing Future Risk
The most effective approach to planning for the future is first to understand it, as there are practically infinite possibilities in the world, leading to an equivalently endless number of alternative scenarios. The disruptive developments that could affect financial services and commerce for the rest of the decade are being translated for IDS Fintech and our clients by the Future Exploration team, which we recently established under our Venture Investment business.
That declarative picture of the future immediately influences the investing levers we employ. We can do this by investing directly in seed to series C firms with innovative technology and established product/market fit. Alternatively, investments in venture capital companies with funds devoted to transformational issues in which IDS Fintech may have a limited current footprint or visibility. Alternatively, we are launching completely new companies through investments in top venture studios employing an inorganic business-building methodology.
Consequently, that affirmative perspective on the future immediately influences the Attempting to predict the winners is premature. Instead, we are building inorganic investment portfolios that are complementary to our leading company and in which we can provide real value. It is best to have options when the future is still unwritten.