Technology is set to disrupt banking and finance through instant digital mortgages, stablecoins, AI advisors, virtual cards, embedded finance and real-time credit scores. Disruption is great if you are prepared for it, the video argues, and banking and finance, usually the last industries to change, are about to feel the full force of the AI and technology growth of recent years.
Here are 15 trends the video says are worth getting ahead of, from the home loan process to the physical bank branch.
Watch the full video here, or skip to the breakdown below.
The 15 trends at a glance
- The timeline to buying your dream home gets a lot faster (0:49)
- You get the benefits of crypto without the volatility (2:27)
- Saving money becomes an addictive game (3:18)
- You get 24/7 access to a personal financial advisor (4:25)
- Politics won’t shake your investments as much (5:18)
- Losing your bank card won’t cut you off from money (7:07)
- You get all the services you need in one go on a big purchase (8:23)
- Ecommerce stores will offer entrepreneurs direct financing (9:30)
- You’ll have more ways to raise capital for your business (10:26)
- Buy now, pay later is back (11:29)
- You won’t have to remember different passwords (12:16)
- Your credit score will change in real time (13:25)
- Sending money internationally will be like sending a text (13:59)
- International transactions won’t get flagged mid-transfer (14:39)
- Set rules to tell your money what to do (15:21)
1. The timeline to buying your dream home gets a lot faster
Quoting Suze Orman, the script says owning a home is a keystone of wealth, both financial affluence and emotional security. The claim is that confusing processes will stop getting in the way.
Digital mortgage systems already used by companies in the UK and the US let you apply online and get an answer within hours, and a denial will not affect your credit score. Machine learning can process an entire application in minutes and flag missing documents immediately, so there are no weeks of waiting to learn you missed something.
Risk assessment also loses human error and emotion, so an approval is accurate and secure. The result is faster, more transparent and less stressful buying.
2. You get the benefits of crypto without the volatility
Cryptocurrency is volatile and unstable, which has kept many people out. Stablecoins keep blockchain’s security and transparency without the swings.
Stablecoins such as Tether and USDC are tied to reliable assets like the US dollar or gold, so there is no worry of an investment losing half its value overnight. This trend is expected to change how money is used, especially in international trade and finance, with governments and banks already paying attention.
3. Saving money becomes an addictive game
Managing money is the most stressful part of life for many people. Apps that track income and expenses across platforms and gamify financial goals are expected to take the world by storm.
You would earn experience points for saving, investing and tracking spending, perhaps compete with friends on leaderboards, and collect badges and in-app rewards. Think Duolingo, but for your money. The approach taps our love of competition and reward, and could be the tool that makes everything click for people who struggle to stay on top of their finances.
4. You get 24/7 access to a personal financial advisor
You may hesitate to bother your advisor with questions, or they do not answer, or your balance is too small to feel worth their time. In the future you could get your portfolio questions answered at any hour.
Some advisor roles will be powered entirely by AI, designing a portfolio around your goals, spending habits and lifestyle. Businesses will scale customer service without massive teams. That, the video says, will push people to the finish line of their financial goals and then open a new track to run on.
5. Politics won’t shake your investments as much
Stock markets are heavily influenced by the political climate. Trade wars, geopolitics and policy changes shape performance, and investors reacting to them push markets up or down.
The example given is the US-China trade war that started in 2018. Tariffs went both ways, and a large company reliant on China for manufacturing and sales saw its stock take a nosedive as investors sold at a loss. By the end of 2019 the company had adjusted, earnings held up and the stock climbed back.
Digital capital market technologies could limit those emotional, panicky actions. The system would analyse the company’s global sales, similar past situations and its ability to weather the storm, and tell you the company is still a solid bet even if the price dips first. It would also automate trading more sophisticatedly in real time and halt trading if volatility is too high, reducing losses. For businesses, capital would be easier to reach without geopolitical worry.
6. Losing your bank card won’t cut you off from money
Virtual bank cards are already available from most banks in Europe. They are not the usual card in a phone wallet, since you still carry a physical one that you can lose. Ask anyone who lost a bank card abroad: paying for the rest of the trip becomes a nightmare.
Virtual cards are fully digital, so you cannot lose one, and you can cancel and replace it immediately. You can set limits on how many times or how long it can be used, and create separate cards for different bills with only the amount needed. A hacker who breaks into a merchant site does not reach your main account, and a card that runs out stops you from overspending.
7. You get all the services you need in one go on a big purchase
Buying a house or car today means hoops for financing, insurance and payment plans. That will change: one purchase, one monthly sum, with insurance, financing and payment plans included.
Tesla began offering insurance with the car, which started a domino effect of non-bank companies offering financial services. For big purchases it argues for a one-payment system covering everything.
8. Ecommerce stores will offer entrepreneurs direct financing
This is embedded finance. Apps like Uber let you pay inside the app instead of switching to your bank, thanks to application programming interfaces that let software applications talk to each other.
The next step is ecommerce platforms offering entrepreneurs loans or financing to set up. Instead of going to a bank to start an online store, a platform such as Shopify Capital lets you get financing and repay it through a portion of your future sales.
9. You’ll have more ways to raise capital for your business
Many great business ideas have died in the cubicles of loan approval officers. Peer-to-peer lending is tempting, though investors are reluctant to back a person they do not know.
AI is expected to screen ideas, assess a business’s potential and track its financials, so investors know what they are getting into. When investors feel more confident, entrepreneurs get more funding. The trend is picking up, but whether it takes off remains to be seen.
10. Buy now, pay later is back
Buy now, pay later has been around since the dawn of trade, but faded when credit cards became mainstream. It is coming back with a bang, especially in online shopping, led by companies like Klarna, Afterpay and Affirm.
You split payments into smaller instalments, often at zero interest. The platforms run a soft credit check, set an initial limit, and require a linked bank account for automatic instalments. It can be risky for those who overspend, but is a bonus for someone in a crisis who needs something immediately. Businesses benefit too, with regular payments building loyalty and payment options lifting sales.
11. You won’t have to remember different passwords
Passwords are probably going to be a thing of the past. You can already open a banking app with your phone’s facial recognition, and the script expects it to roll out everywhere, even at ATMs and card machines.
With biometric verification you can use your fingerprint, face or voice to open accounts and approve transactions. It is faster, easier and more secure than endless passwords, and means no more resets. It is called the future gold standard for transactions.
12. Your credit score will change in real time
One mistake can tank a credit score, and fixing it takes months. A personal finance columnist is quoted saying a credit score is not always a reflection of financial responsibility and can hurt those who have hit a rough patch or do not rely on credit.
A mistake can affect renting, jobs and insurance for years, and the score is based on cards, mortgages and loans even though there are other ways to show you are responsible. Real-time scoring would adjust your score hours or days after you pay off a loan or earn extra income, and could count rent, utility bills and subscription payments.
13. Sending money internationally will be like sending a text
International transfers currently hit you with fees and exchange rates at both ends. They are slow too, because staff at different banks go through the day’s transactions manually, check them and pass them on.
Blockchain and digital currencies will make global payments easier and cheaper, and banks will have to find a way to join.
14. International transactions won’t get flagged mid-transfer
Fees and delays are annoying, but nothing is as frustrating as a transfer being flagged for a regulation or compliance issue after the money has gone. Your investment then sits in limbo.
That stress is expected to disappear. Your banking app will tell you about any issue before you send, so you can gather and upload the documents first.
15. Set rules to tell your money what to do
Money management plans will adjust automatically to your situation. You could set a rule that 5% more goes into savings whenever your income passes a certain amount, or that a percentage of your balance is invested in stocks whenever it reaches a set level.
Another rule could limit daily spending if your balance dips below a threshold, to keep you from going flat broke that month. Your money would adapt to life events quickly and automatically.
Bonus: there probably won’t be physical banks anymore. ATMs already changed the bank visit, and the script expects the rest of the services to move online.
Ride the wave
Change is inevitable, the script says, and the last 200 years show it. You can ride the wave or fight it and get caught in the current.
Many of these shifts are already live in some places, so the practical move is to watch which ones reach your bank and your country first.
FAQ
How will technology change banking?
The video lists 15 shifts, including digital mortgages, stablecoins, AI financial advisors, virtual cards, embedded finance, buy now pay later, biometric logins, real-time credit scores and cheaper international payments.
What are stablecoins?
Stablecoins offer blockchain’s security and transparency without crypto’s volatility. Coins like Tether and USDC are tied to assets such as the US dollar or gold.
What is embedded finance?
It means financial services built into non-bank apps and platforms, such as paying inside an app or getting a loan from an ecommerce platform that you repay through future sales.
What is a virtual bank card?
A fully digital card you cannot lose. You can cancel or replace it instantly, set usage limits, and create separate cards for different bills so your main account stays protected.
Will physical banks disappear?
Branches as we know them will change and maybe disappear, as services move online and become quicker and more accurate.
Keep reading
- 15 Ways to Increase Your Financial IQ
- 15 Things You Didn’t Know about the Fintech Industry
- 15 Ways to Survive the Next Financial Crisis
