Revealed: Three financial sector tech trends to watch for 2020
It’s hard to believe, but we’re already two decades into the 21st century, and although there are things that may not be as we predicted, there are many that have surprised us.
As always, technology has been one of the biggest drivers of change, and one of the biggest changes of the 21st century is that tech has become more accessible and familiar to all of us.
Every new year brings new trends and things to watch, and 2020 will be no different.
So as we embark on this exciting new decade, here are some of the top tech trends in the financial sector we think will be game-changers for the Caribbean in 2020.
- A key player in the financial sector
One of the industries that will benefit the most from using technology in 2020 is the financial industry. With mobile internet penetration in Latin America and the Caribbean expected to hit 66% in 2025, the number of people who manage their lives at the touch of a phone screen will grow. And as the years go by, we will start to see how the Caribbean shapes into an even more innovative region. Jamaica announced the launch of its very own e-commerce platform; Barbados and Trinidad and Tobago scored 67.9 and 67.4 points, respectively in the GSMA Mobile Connectivity Index - above countries with 70 times their population size; and the Bahamas as well as the Cayman Islands are part of the Fintech Ibero-American organization. We are seeing how technology is starting to shape how we are as a region, and our participation in the financial sector.
Start-ups and Financial Technology players will be essential during the years to come as digital payments and transfers, financial inclusion, and providing service to the unbanked become crucial for the economic growth of the region. Traditional bank institutions will have to find a way to work with them to create new business models which will help reach new segments while enabling customers to process all their transactions most conveniently.
- Technology will start to democratize
One of the most significant breakthroughs of 2020 will be that all the technology trends we’ve been reading about for years will most likely become tangible. The technological democratization is near, and the adoption of services like electronic or virtual wallets, and digital payments are some of the proof. E-wallets provide a fast, secure, low-cost method to use, store, and send money, while facilitating day-to-day transactions for individuals. At the same time, they offer the user and the institution a more convenient and secure platform than a debit card. They also create a connectivity that allows the institutions to send valuable information like balances and alerts.
We already have several examples in the Caribbean, like Digicel MyCash and MyCash Jamaica, a virtual solution created by Digicel in partnership with Sagicor Bank and Mastercard that provides a virtual bank account and prepaid card that allows anyone in Jamaica to receive money transfers from the United States, acquire top-ups, and make any purchases online and in retail.
- Blockchain will change the game
According to PwC, 13 Blockchain companies got over $365 million in funding in the past year alone. Although we read a lot about this technology and the many ways in which it works, 57% of the people confessed that they are unsure or unlikely to respond to this trend. However, for some territories, this might not be the case.
In 2019, many organizations in the Caribbean were already looking into Blockchain for the benefits it could bring:
- The Eastern Caribbean Central Bank (ECCB) and the Barbados-based fintech company, Bitt Inc. (Bitt) signed a contract to conduct a Blockchain-issued Central Bank Digital Currency (CBDC)
- In Trinidad and Tobago, there is a Blockchain system to track and trace the quality of cocoa. The project is being developed and tried by Bioversity International with the support of their partner, AgUnity.
For 2020, Blockchain will be a game-changer, as we will see how all of the current projects come to life and traditional financial institutions start evaluating how some of its capabilities such as fraud protection and authenticity confirmation help them.
What does it all mean?
Technology is one of the main factors that determines the pace of our generation and we are adopting new technology features faster than ever before. It took more than 60 years for most of the population to adopt the telephone, but within 10 years, most had access to mobile phones.
It has been years of discovery, trial, and error, but now we are starting to see a new face of technology: a more human one that facilitates tasks in areas that have been filled with tons of processes. From now on, technology most likely will be at the service of the people to improve their day-to-day lives; and 2020 might be the first year when we will see it very vividly.