One such area is digital financial advice, or robo advice, which Davis says is offering asset managers an opportunity to enhance their retail strategies. It is also offering institutional asset managers a new channel to develop a retail-centric offering.
A second important area of financial technology innovation is in lending, through the advent of ‘peer-to-peer’ lenders or marketplace lenders.
These lenders are using a variety of strategies and data to improve service to parts of the market, including small businesses, super-prime borrowers and sub-prime borrowers.
Leading platforms in the consumer lending sector include Lending Club and Prosper, while rapidly growing platforms in the small business lending sector include Dealstruck and On Deck.
Many of these platforms are also providing individuals and institutions unique opportunities to invest in loans.
Consumers are becoming increasingly comfortable with having personal and banking data and transaction details provided through via mobile phones, tablets and other electronic devices.
The most important motivators currently driving industry decision making are improving the customer experience, appealing to changing customer behavior, reducing the cost of services and expanding the breadth of services delivered to customers.
According to Davis, financial technology has improved the financial services industry’s ability to understand the consumer, and innovate to improve their experiences.
Data gleaned from enhanced consumer feedback and digital activity, including real-time transactions and social media, has been the result of growing investment in purchasing and payment methods.