Technology and the Future of Credit

Goals

To find information on how the future of credit is set to change as a result of how fintech companies

Early Findings

Future of Credit

  • According to the World Economic Forum, the three technologies that are expected to permanently change the banking sector include artificial intelligence, blockchain, and Cloud computing.
  • Artificial intelligence is expected to enable financial services organizations to better predict their customer needs and offer unprecedented levels of personalization while blockchain is expected to offer the benefits of disintermediation, transparency, security, unhackability, and automation.
  • On the other hand, in the financial industry, cloud computing is expected to facilitate cost-cutting for peripheral systems like HR and procurement and act as a business enabler that can bring flexibility and innovation to traditionally on-premise systems.

Banking as a Service (BaaS)

  • BaaS is a strategy used by financial organizations to enable digital banking services through the use of an Application Programming Interface (API).
  • To succeed with BaaS, banks need to implement three key facets of the service's approach i.e. a command of open banking APIs, a shift to solutions assembly, and a focus on innovation and the user experience.
  • Most global banks perceive BaaS as an essential part of their future growth. The six industry trends that are mandating this shift include componentization, industrialization, service, innovation, open banking platforms, and simpler banking options.

Intersection of Technology and Finance: Apple and Goldman Sachs

  • In 2019, Apple and Goldman Sachs announced the launch of the Apple Card.
  • This product is a good example of the how technology and finance will merge in the future to provide fintech products to digital consumers.
  • Goldman Sachs is a "leading global investment banking, securities and investment management firm that provides a wide range of financial services to a diversified client base that includes corporations, financial institutions, and high-net-worth individuals."
  • On the other hand, Apple is a global technology company that majorly makes computing products and services. These products and services include Mac, iPad , iPhone , AirPods , iPod touch, Apple Music, and iCloud.
  • The major technological differences between the Apple Card and other credit cards is the fact that the use of the card is integrated into the iPhone and the card does not have numbers for security purposes.

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