Financial innovation is often referred to as ‘FinTech’ — a portmanteau of the words finance and technology which has been, and will continue to be, a focal point of conversation in the financial industry, particularly in the banking sector.

Initially the term defined back-end activities, however currently the definition has broadened and now covers several different technological creations and innovations taking place in the financial industry.

FinTech plays an increasingly prominent role in all facets of the financial industry and includes numerous new methods of banking transactions, digital money, loans and wealth management. Some estimate that one in every three customers from the banking industry utilises this technology, and its awareness continues to increase by the day.

There is no shortage of innovation in the spheres of finance. From blockchain to artificial intelligence, the technologies of the fourth industrial revolution have been slowly seeping into finance. Ultimately, however, it is likely that these technologies will end up making financial services available to more people and serve those traditionally left out of the financial system. Here are three examples of innovations in this area.

Lending: Traditionally, to justify loans, financial institutions would analyse your credit worthiness and examine the amount of funds in your accounts, your transaction histories and predictable income streams, all of which revolve around bank account activity. However, today’s FinTech players may use non-traditional data sources such as web search history, mobile phone data, and social networking to determine creditworthiness. This enables the unbanked population to access microloans and ultimately allows accessible financing to a larger pool.

Flexible payment plans: Affordability and flexibility in FinTech will be big in the coming years. One promising innovation in this space is pay-as-you-go (PAYGo) financing. The idea of PAYGo solutions is to allow customers to break down payments for goods and services into small amounts and pay them weekly or even monthly, instead of paying a large, upfront sum. This model has been used by companies in the clean energy sector to provide solar home systems across emerging markets.

Blockchain: The FinTech blockchain market is growing at a fast pace, due to the rising cryptocurrency market cap and initial currency offering (ICO), high computability with financial services ecosystem, faster transactions, and reduced total cost of ownership. The FinTech blockchain ecosystem comprises vendors, such as AWS (US), IBM (US), Ripple (US) and is unlikely to relinquish its presence anytime soon. These players have adopted multiple business strategies to extend their global presence and expand their market share. With highly attractive but speculative projections, the global FinTech blockchain market size is expected to grow from US$370.3 million in 2018 to US$6,228.2 million by 2023, at a compound annual growth rate of 75.9 per cent during the forecast period.

Learn more at Tech Beach Retreat!

We look forward to hearing more from a series of local and global experts in the technology and innovation sectors at Tech Beach Retreat, which will take place November 30 – December 2 at Iberostar Grand Rose Hall Resort in Montego Bay, Jamaica.

One such master of industry is Michele Romanow, a key influencer in global business. Her commendable record of running three companies before the age of 28 is an inspiration to many. She is also known as one of the dragons on CBC’s Dragon’s Den, and her business engagements continue to progress through several ventures. She is one of the founders of a financial services company popularly known as Clearbanc, positioned as a progressive institution providing financial solutions to the new economy. The firm provides financial support to more than 50 million freelancers and self-employed professionals in North America.

Jeff Pulver, the co-founder of Vonage, a company that transformed communication through voice-over-IP (VOIP) technology, will also be present at the conference. Jeff boasts a lustrous CV as an Internet pioneer, entrepreneur, investor, astrophotographer, speaker, and futurist. Known as a globally renowned Internet-thought leader, in 1995 he defined “VON” to stand for voice/video on the net. From 1997 to 2008 he hosted/produced the VON Conferences which helped grow the VoIP industry. His work in Washington is the reason that services highly familiar to our Caribbean society, such as FaceTime, Messenger and WhatsApp are free.

Through insights from such pioneers of knowledge we must embrace the role of technology in our society, both in the public and private sectors. Only in so doing will we harness its power in allowing our beloved Caribbean to derive insights that allow us to leapfrog our less-nimble contemporaries and rise to the frontiers of our boundless potential.