2018: The Year Ahead In Fintech

2017 was quite a year for FinTech. So, as we head into 2018, what can we expect to see? Here are a few things we’re keeping our eye on:

Infrastructure and Enabling Becomes Focus in the $640bn Tech Space

While a lot of investment lies in front user-facing technology, no one has really invested in building the new technology, enabling or infrastructure that incumbents can use. This will result in incumbents biting the bullet to release themselves from massive legacy systems and moving their platforms to cloud-like services. Legacy tech providers are going to be forced to reckon with a consultative model that doesn’t allow for incumbents to advance. And incumbents will focus on creating flexible and light, yet secure, value chains that don’t wed them to one platform or cost base.

How This is Playing Out

Cross River and n26 become examples of flexible, cloud-based plug & play platforms.

Due to client demand, FIS, IBM, and CA began cutting consultants and investing in scalable enabling technologies available in the cloud.

nCino demonstrates how banks can use a cloud-based platform for a service that’s accessible via Salesforce, a growing ecosystem player.

Talent Race and Shift

The labor market for finance and FinTech is going to become increasingly confusing to incumbents. On one hand, they’ll need to maintain legacy systems with tenured staff, while in order to compete they’ll need to shift to pro-developer workforces across functions. And as many top-ranked engineers start to head west, the east coast finance companies and FinTech companies will need creative solutions to attract and retain fresh talent.

“Millennials…know how to upgrade your complicated infrastructure from Fortran to Ruby, how blockchain applies to your business model and how to save money on market data. Millennials can also streamline your interbank APIs and get your whole platform on the cloud. It’s a brave new world, and it’s not getting any slower.” (Forbes)