Fintech isn’t a trend, and now more than ever, businesses are starting to believe it. Governmental regulatory bodies like The Office of the Comptroller of the Currency granting Fintech a special charter to dodge regulatory barriers to automation that could fundamentally change everything about the future of finance.

While many welcome this change with open arms, others fear the pace of adoption in an industry that’s slow to give bank customers what they want—more access to their money and a greater sense of personalization in the user experience. These customer expectations are part of raising the bar.

Fintech—much more than a buzzword—is doing more than disrupting. Fintech is building partnerships with banks to deliver the technology pipeline needed to engage a generation of Millennials hungry for on-demand, personalized services. According to Deloitte, Millennials will be the prevailing global workforce by 2025, accounting for 75 percent of it in all.

Automation on a mass scale has paved the way forward. Let’s look at a few ways automation is tearing down barriers to doing business.

1. Increased competition: Automation lowers barriers for new entrants into the market.

The McKinsey Global Institute released a study in January of 2017, assessing the impact of automation on a global scale. The research firm conveyed that while automation might be a slow-building wave, it is a far-reaching one for individuals doing fixed tasks in predictable environments.

The study implicated jobs from low-skilled factory labor to white-collar professionals like doctors and engineers are under the lens of reorganization due to automation. The report says:

“The effects of automation might be slow at a macro level, within entire sectors or economies, for example, but they could be quite fast at a micro level, for individual workers whose activities are automated or for companies whose industries are disrupted by competitors using automation.”

This means it’s going to be much easier for the small fish to enter the same streams that the big fish have been running in for some time. We’re already seeing it with small ecommerce retailers competing with big box department stores likes Macys or Nordstrom for sales. This kind of movement will only increase with the rapid expansion of automation solutions enabling businesses to focus on their core competencies with laser-like precision.

2. Markets free of legacy technology have an unparalleled advantage.

Riding the front of the automation wave are countries and industries that lack the burden of legacy technology. There’s no sharper advantage than being legacy-free, and many emerging international markets are picking up that edge.

BRIC is an acronym for the emerging international markets showing the most promise for economic development and influence in the twenty-first century. The phrase was coined by Jim O’Neil of Goldman Sachs back in 2001, identifying the nations of Brazil, Russia, India and China as those showing particular promise based on GDP and other growth factors. China is showing itself as the strongest contender, particularly in its manufacturing and technological prowess. A few years ago, a statistic said that in China there are more cellphones in circulation than people in America.

There’s little holding back the rest of the world from taking the lead in tech innovation that has typically been dominated by Western Europe or Silicon Valley. Places like Brazil, China, and India are picking up the pace. New entrants free of the shackles of old technology are able to scale at an impressive rate. Call it outsourcing or a global economy but moving faster is the name of the game.

3. Blockchain will cut out middlemen and their services completely.

Blockchain has earth-shattering automation potential, and its effect in recent headlines is not overstated. Some are comparing blockchain’s expected influence on financial markets to the advent of the internet. Some of the reason why is the way it will give both sides of a transaction immediate and unprecedented access to a single truth source.

Part of its novelty is that there is no central authority required to maintain or verify its record of truth. It is self-verifying, by attaching an ordered list of records called blocks. It creates a unique fingerprint that cannot be modified or altered by referencing the previous block.

The audit process of the future could be completely automated. Ownership of assets including inventory could be registered and tracked using this new form of technology. The possibilities are endless, but one thing is certain, an intermediary to verify the legitimacy of these transactions is not required.

4. Federal regulatory branches swing open the doors to innovation.

Fintech is just one example of how disruptors can change the entire mindset of an industry. But for most blazing new trails in any industry, there are a few frustrations unique to a startup. Fintechs must gain licenses to bank in each state they have customers in, which quickly translates into costly regulatory hurdles to scale.

When the Office of the Comptroller of the Currency, a division of the United States Treasury Department, granted fintech a “special purpose national bank charter” back in December of 2016, this welcome news meant one less hurdle to clear before gaining traction as a business. It removed some of the built-in resistance to innovating in the financial sphere, giving fintechs the green light to proceed with their idea.

5. Traditional banking services will be driven by new values.

As Brian Stephens National Leader of Financial Services for KPMG says: “Be prepared for customers to move money how they want, when they want.” This differs dramatically from what traditionally structured banking services have offered consumers, though we’re starting to see a positive shift with mobile banking functionality and the elimination of fees to transfer money.

Financial startups and fintechs are changing all of that. Now biometrics are being used to verify bank account ownership. Imagine instead of typing in or remembering a password, account access is granted with a selfie. And if that is not futuristic enough, there’s always the idea of finance bots recommending smart investment strategies or even trading stocks in the near future.

So what’s the ultimate goal of automation?

To break down barriers to competition, to make finance more accessible to a broader range of people than ever before, and to outsource tasks that are not high-level, to automation. And while not every disruptor will bring qualitative change, those aimed at shape-shifting to fit customer expectations have a great chance of changing the future business landscape.


Lauren Ruef is a research analyst and writer for