At the crossroads of these actors stands millennials who will offer and accept financial services bearing in mind a distinct worldview. Thus, we can read the tea leaves that traditional finance up to 2030 and beyond will shape the way market participants act within a more globalized and "sharing economy".
Without question, several decades have past, harrowing in consistent and disruptive technological advances. Traditional finance during 6 decades can be summarized as follows, according to Forbes in 2015:
- 1950s: credit cards replacing money
- 1960s: ATMs replacing bank tellers
- 1970s: electronic stock trading introduced
- 1980s: mainframe computers replacing hard copy records collection
- 1990s: Internet and e-commerce replacing brick and mortar stores
- 2000s: online stock brokerage websites introduced
- What next?
New developments in traditional finance will be a function of the Blockchain within FinTech, efficient government and global development initiatives, and finally millennials who will seek and offer financial services via the “Sharing Economy”.
The Blockchain and FinTech
While artificial intelligence attempts to trudge its path toward financial service supremacy, the Blockchain is the latest iteration of FinTech’s advancement; it is the next bullet point to be placed in the social innovation history books. The metadata world has a digital counterpart which can enforce security, transparency, and anonymity. It is clear that the Blockchain is well-suited to meet the needs of financial service innovation, as recognized by EY, PwC, and Deloitte. Where financial services are more efficient, so goes business, institutions, and policymakers.
Financial Services for a Global Community
Additionally, the Blockchain is quietly and steadily being used to achieve more efficient local governance and the global 2030 United Nations Sustainable Development Goals (UN SDGs). With a 2016 UN procurement total of $17.7 billion and Blockchain initiatives being administered by the United Nations Development Programme, World Food Programme, and the United Nations General Assembly, it is inevitable: financial advisors are migrating to the Blockchain and will naturally partner with governments, international organizations, and customers to see the change a global community seeks in the world. It is easily foreseeable to imagine Blockchain-rendered financial services to governments and organizations attempting to tackle, in parallel to international organizations, the challenges of local, sustainable development.
Let’s also consider the mentality and preferences of millennials in offering and seeking financial services for 2030 and beyond. Having grown up during the tumultuous financial crisis of 2007/2008 under the wings of their baby boomer parents, millennials are more risk averse and idealistic when seeking financial advice and making financial decisions. This approach leads to investments in socially responsible enterprises, with a concern of a market relapse and inability to make a quick and full exit of the market (if such an event occurs). Further, with a preference toward lifestyle over income as well as transparency and social media marketing, millennial financial advisors are also going to change the way that such services are rendered to end consumers.
Further, how does social idealism of the 2030 customer and the strive for more-perfect financial advice coexist? One way is through the “Sharing Economy”, defined as the sharing of underutilized assets (monetized or not) in ways that improve efficiency, sustainability, and community. Digital platforms such as Uber, RelayRides, Zaarly, and Airbnb have transformed the global economy in a short period of time. Thus, the Sharing Economy concept will undoubtedly flood into financial services, as it matches providers of financial intelligence to end customers by leveraging information technology. Already, one can see the emergence of FinTech companies addressing market needs, such as anti-money laundering, through the Sharing Economy.
There is no doubt that traditional finance is to be placed on its head for the betterment of its customers and shareholders. In doing so, the Blockchain will play a crucial role in innovating finance, facilitating metadata use for the “Sharing Economy” in harmony with a local and global development agenda. Thus, when someone asks the question, “What will financial services in 2030 look like?”, one should answer “Yet again my friend, a new frontier.”