Jordi Nebot, CEO of PaynoPain and fintech expert
The fintech business is living a moment of full maturity. After an unprecedented boom of all kinds of technological services and products focused on revolutionizing the world of finance, only that fintech company that is ahead of the challenges that are to come can become the true leader of the change we are living. And 2019 will be a decisive year to achieve the proposed objectives, a year full of challenges for the sector.
Real time, a challenge for banks and fintech companies
If we reflect on the challenges that the fintech company will face in 2019, we quickly see that these are intrinsically linked to the challenges faced by banks. And one of the biggest challenges that banks face is the real time, that’s the reason why the instant transfers and the PSD2 will be a game changer the next years.
Imagine a system where you no longer need to pay by card, but with a service such as transfers, which are usually free. Obviously some costs will be derived by consuming the banks’ API’s, but what is clear is that this new system will suppose especially a challenge for VISA and MASTERCARD, who will have to work in order to not lose their market share.
Optimization of new platforms, a complicated challenge without fintech companies
We’re also living a boom of new PFP platforms, collaborative economy platforms, etc., and fintech companies are increasingly needed to help with the complicated management, both regulatory and banking, of this type of services. Automation of the KYC, pay-ins with different means of payment, pay-outs, aggregation of bank data, etc. The platforms that offer this type of services will be greatly benefited if they collaborate with the fintech company that knows how to anticipate their needs.
Financial inclusion, a large-scale challenge
But, of course, the world is not only Europe. There are also many developing countries that have a promising future in the fintech sector in a different way. Essentially, the current objective, which will be a priority in 2019, is to seek financial inclusion by making use of mobile technologies. We can verify this easily, in PaynoPain we have several projects underway with this objective, in the Bahamas, Brazil or the Dominican Republic. But can also serve as an example cases such as M-pesa. Very soon this kind of projects will be the usual way to provide services to that part of the population that is isolated from the financial system.
Regtech, a promising challenge
The regtech is already a reality, but more and more startups dedicated to this area of the fintech universe will appear and more banks will collaborate with this type of companies to reduce their operating costs. We can affirm that 2019 is going to be a definitive year for regulatory technology.
Blockchain, the challenge of being realistic
Moving on to blockchain, everything indicates that in 2019 will settle the real uses in which this technology contributes value. Currently we live a hype moment in which it seems that these new technologies can solve any previous failure of the system. However, as technology has its advantages and disadvantages, right now we still not being critical enough.
Obviously there are very promising projects like Ethereum, Hyperledger, Corda or Quorum, which are very powerful tools for developers to find innovative solutions to common problems. Document management, secure identification systems, signatures and contracts, health or logistics are just some fields where this technology can be applied. But I repeat: its use doesn’t always add value.
And, speaking of challenges, we must understand and learn to differentiate when a totally decentralized system is necessary or provides some improvement, or when we’re actually limiting the capacity of the system itself. But remember, it’s possible to look for mixed solutions with private blockchains or, as is allowed by Hyperledger, with nodes with different degrees of access and functionality.