The Economist: The Fintech Revolution

This week’s special report in The Economist on Financial Technology (or Fintech) talks about the new wave of ideas changing traditional finance, from payments to wealth management, crowd funding and digital currencies. Fintech start-ups continue to attract record investment year-on-year from the venture capital community, and many are long past the experimental phase. The report also discusses the uncertain and evolving relationship between fintech and traditional banks.

As we have pointed out in some of our previous posts, despite the fact that many of the most relevant trends in this space are still nascent or emerging, there is huge potential for them to impact the asset management industry and subsequently our world of investor relations.

For those fairly new to the subject, you may find our basic Fintech Dictionary useful in explaining some basic concepts and definitions.

A few points from the Economist report in particular caught our attention:

  • Although the amount of assets managed by automated wealth managers (so-called ‘robo-advisors’) doubles every few months or so, the global total is still only around $20bn, compared to roughly $17tr for traditional managers. The argument in favour of robo-advisors, which mainly utilise indexing strategies while staying clear of mutual funds and individual stocks, is that they can use algorithms to provide sound investment advice for a fraction of the price of a real life advisor. The majority of the take-up so far has been from clients under 35 with an average account size of less than $100,000. It is interesting to note that Schoders, Goldman Sachs, Vanguard, Schwab and JP Morgan Chase have all either made direct investments in robo-advisory platforms or are planning to launch their own.
  • The electronic ledger ‘Blockchain’ is the technology behind the digital currency Bitcoin. Blockchain offers a decentralised, public account of all Bitcoin transactions. Enthusiasts believe its application in the financial markets may be much broader; in theory the technology could be applied across a wide range of applications, such as the issuance and trading of securities. Unsurprisingly, a number of large financial institutions, as well as exchanges, have taken steps to explore this further.
  • Providing financial services to millions of customers, especially to those in populous emerging markets in Asia and Africa who previously had no access to them, is another area that fintech looks to address. While only 25% of people in Africa have access to a bank account, over 80% have a mobile telephone. Taking advantage of this gap is M-pesa, a Kenyan phone based payments scheme now used by three quarters of adults in the country. As these concepts evolve it is fascinating to think about the possibilities and applications for providing credit, retirement and investment solutions to millions almost overnight.

We will continue look at some of these ideas in more depth over the summer.

298 thoughts on “The Economist: The Fintech Revolution”

  1. I am also writing to let you be aware of of the terrific encounter my cousin’s princess experienced reading through yuor web blog. She mastered some details, including what it’s like to have an excellent coaching spirit to get many people quite simply comprehend various tricky subject matter. You really did more than my expectations. Thanks for offering such priceless, safe, edifying and cool tips on this topic to Kate.

    Like

  2. I had been honored to receive a call coming from a friend as he observed the important points shared in your site. Looking at your blog publication is a real great experience. Thank you for thinking of readers like me, and I desire for you the best of achievements for a professional surface area. resorts in cuba

    Like

  3. I want to point out my appreciation for your kindness giving support to those who actually need help with this particular area of interest. Your special commitment to passing the solution all through came to be incredibly useful and have helped people much like me to realize their objectives. The helpful facts signifies a whole lot to me and much more to my office workers. Thanks a ton; from everyone of us.

    Like

  4. We’re a group of volunteers and starting a new scheme in our community. Your web site offered us with valuable information to work on. You’ve done a formidable job and our whole community will be thankful to you.

    Like

  5. My brother suggested I might like this blog. He was entirely right. This post truly made my day. You cann’t imagine just how much time I had spent for this information! Thanks!

    Like

  6. I have not checked in here for some time because I thought it was getting boring, but the last few posts are great quality so I guess I’ll add you back to my daily bloglist. You deserve it my friend 🙂

    Like

  7. Thank you for the sensible critique. Me & my neighbor were just preparing to do a little research on this. We got a grab a book from our area library but I think I learned more from this post. I’m very glad to see such fantastic info being shared freely out there.

    Like

  8. Can I just say what a relief to locate somebody that really knows what theyre discussing on-line. You definitely realize how to bring a problem to light to make it critical. Workout . ought to check out this and fully grasp this side of your story. I cant believe youre no more well-liked since you also definitely provide the gift.

    Like

  9. Wow! This could be one particular of the most useful blogs We’ve ever arrive across on this subject. Basically Fantastic. I am also an expert in this topic so I can understand your effort.

    Like

  10. I’ll gear this review to 2 types of people: current Zune owners who are considering an upgrade, and people trying to decide between a Zune and an iPod. (There are other players worth considering out there, like the Sony Walkman X, but I hope this gives you enough info to make an informed decision of the Zune vs players other than the iPod line as well.)

    Like

  11. I am really impressed with your writing skills and also with the layout on your blog. Is this a paid theme or did you customize it yourself? Either way keep up the nice quality writing, it is rare to see a nice blog like this one today..

    Like

  12. Hello, Neat post. There’s an issue together with your website in internet explorer, could test this… IE still is the market chief and a huge part of other people will miss your wonderful writing due to this problem.

    Like

  13. You can definitely see your enthusiasm in the work you write. The world hopes for more passionate writers like you who are not afraid to mention how they believe. All the time go after your heart. “The only way most people recognize their limits is by trespassing on them.” by Tom Morris.

    Like

  14. I do not even know how I ended up here, but I thought this post was good. I don’t know who you are but definitely you are going to a famous blogger if you aren’t already ?? Cheers!

    Like

  15. I have not checked in here for a while since I thought it was getting boring, but the last several posts are really good quality so I guess I will add you back to my everyday bloglist. You deserve it my friend.

    Like

  16. I simply wished to thank you very much once more. I do not know the things that I could possibly have done in the absence of the pointers documented by you on such situation. This has been a very distressing issue in my position, but looking at a new specialised fashion you dealt with it took me to cry with contentment. I will be thankful for your work and as well , hope you recognize what a great job your are carrying out teaching the rest via your web site. I am sure you haven’t met all of us.

    Like

  17. I’m so happy to read this. This is the type of manual that needs to be given and not the random misinformation that’s at the other blogs. Appreciate your sharing this greatest doc.

    Like

  18. Good – I should certainly pronounce, impressed with your site. I had no trouble navigating through all tabs as well as related info ended up being truly easy to do to access. I recently found what I hoped for before you know it at all. Quite unusual. Is likely to appreciate it for those who add forums or anything, website theme . a tones way for your client to communicate. Excellent task.

    Like

  19. I actually wanted to develop a brief remark to say thanks to you for some of the great secrets you are giving out at this website. My time consuming internet research has at the end of the day been paid with reputable know-how to write about with my classmates and friends. I ‘d tell you that many of us site visitors actually are truly blessed to live in a good site with very many brilliant professionals with insightful solutions. I feel truly privileged to have come across your webpage and look forward to many more enjoyable times reading here. Thank you once more for everything.

    Like

  20. Hello There. I found your blog using msn. This is an extremely well written article. I’ll make sure to bookmark it and come back to read more of your useful information. Thanks for the post. I’ll certainly return.

    Like

  21. obviously like your web site but you need to take a look at the spelling on several of your posts. A number of them are rife with spelling issues and I to find it very troublesome to inform the reality on the other hand I will surely come again again.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s