The financial services industry is often one of the hardest industries to disrupt. Consumers build a sense of trust and loyalty with their financial provider and will often continue that relationship for a lifetime.

Traditionally, banks have controlled the infrastructure, hardware and operating systems for financial services. However, startups are beginning to upend that model. There is no longer a one-size-fits-all approach to banking and startups have the agile infrastructure to personalize to individual consumer needs.

Paypal was one of the first major fintech companies, and their CEO, Dan Schulman, has echoed similar sentiments about startups leading the charge to democratize financial freedom: "The simplest transaction - receiving a paycheck, paying bills or sending money to a loved one - can be distressingly inconvenient and disproportionately expensive. Not only is this is manifestly unfair, but it is economically counterproductive."

So how can change be enacted? While many point straight to access to mobile devices, 7.19 billion and counting, there are other important trends shaping the future of financial democratization.

Digitization leads to Self-Service

Data-driven intelligence is a huge driver to a deeper comprehension of consumer demographics and markets. Naturally, the better brands understand their target market, the more successfully they can personalize and capture their audience.

There are machine learning applications like RecargaPay, the mobile wallet focused on financial services for the unbanked, that enable the consumer's ability to self-serve thanks to digital capabilities. "Consumers have come to demand seamless digital experiences," says Rodrigo Teijeiro, CEO of RecargaPay. "Financial transactions are not exempt from digitization and as the availability and adoption of mobile devices continues to expand we will see more products and services catering to the consumer self-service."

Artificial Intelligence, Virtual Reality, and Robotics

There is not one industry untouched by the capabilities of artificial intelligence. Machine learning capabilities penetrated the banking industry years ago. However, virtual reality and robotics will soon expand fintech offerings by bounds. Robo-advisors may still be in their infancy, but as a recent GfK survey noted, millennials and younger consumers are more friendly to robo-advisors than humans.

"We will see increased traction and exponential growth in online advice and discretionary wealth management tools such as robo-advisors," Alex Conde of Questrade recently said. "People will increasingly embrace wealth management solutions like robo-advisors and companies will leverage technology to make the process even easier and more convenient."

Big Data

Big data has been pivotal in big banking. But the time has come to refine that information and create opportunities for banked and unbanked consumers alike.

There are over 1.7 billion people with mobile phones that are currently excluded from the financial system. Innovative fintech companies are finding ways to assess financial risk through multiple data sources. By building predictive models, fintech companies are able to analyze unstructured data and assess credit risk. This data science also helps strengthen risk management in areas such as fraud detection, financial crime compliance, and stress-testing.

Sharing Economy

The sharing economy is a socio-economic ecosystem built around the sharing of physical, intellectual and human resources. If you think of this concept from a nuts-and-bolts perspective, the exchange of goods is how people and economies first started.

Thanks to innovation, Peer-to-Peer (P2P) and crowdfunding initiatives like Venmo are taking off. We are experiencing a more decentralized economy because it is easier for people to connect and trade for a mutually beneficial transaction.

Frederik Gammelby Jensen from deemly describes financial decentralization like this: "It's simply cutting out the middleman by facilitating contact to individuals who want to exchange goods and money, just like when you go to a farmer's market or ride with Uber."


Financial Risk Managers unsurprisingly dubbed security as their principal challenge. In one report, 64% of consumers said they are unlikely to do business with a company where their security was breached.

U.S Attorney Preet Bharara stresses that banks and other financial firms are prime targets and it is important for these companies to share cyber risk mitigation strategies and implement plans to mitigate that chance.

"Our economic infrastructure lives in a digital space, which means leveraging big data to streamline financial services to keep information secure, while also well organized and transparent, making it accessible for regulatory bodies," says Teijeiro. "The shape of personal finance is evolving. Vendors of financial services that invest in new technologies and data management will further reduce costs and deliver new digital capabilities to deliver significant revenue opportunities."