Most of us remember the financial crisis of 2008 all too well…

While the financial sector as a whole began to struggle, the advent of FinTech began to reshape the world. New banking rules and regulations, budget crunches for families and what once seemed like a world of possibility suddenly turned into a distant and grim memory.

WhatsApp launched on May 3, 2009, followed by the release of the iPhone and the introduction of Air BnB. Not only did this create a brand new set of industries, but it also portended endless possibilities for entrepreneurs.

One of my colleagues, an analyst at Google, stated that within the next ten to fifteen years, the economy will suffer something on the order of a 50% loss in banking jobs and cause a direct hit to the economy unless banks are able to keep up with the advancement of technology.

Here is a list of the top ten FinTech Companies (courtesy of Forbes) that are currently taking the world by storm:

  • Stripe – Valued at $35 billion just launched a business credit card. This company allows businesses to receive online payments. Their customer base currently includes both Facebook and Amazon.
  • Ripple – Valued at $10 billion focuses on facilitating international payments. Including cryptocurrency.
  • Coinbase – Valued at $8.1 billion is offering crypto custodial services to institutions. Adding features like “wallet”.
  • Robinhood – Valued at $7.6 billion just launched “cash management” which is a feature that pays 1.8% in interest on un-invested cash in your brokerage account. Currently competing with companies like Charles Schwab and Fidelity.
  • Chime – Valued at $5.8 billion is offering no-fee checking accounts, has up to $100 in coverage of overdraft protection, AND allows access to your paycheck up to two days early. Did we mention they’re an online bank? Talk about adapting to the times.
  • Plaid – Valued at $5.3 billion consolidates all of the cash apps you can imagine and safely transfers funds into your account.
  • SoFi – Valued at $4.8 billion was at first a student refinancing startup. They’ve now branched out to mortgages, personal loans and checking accounts with over 850,000 members.
  • Credit Karma – Valued at $4 billion, Credit Karma is a free credit score monitoring service. It provides suggestions for financial planning based on your current credit score.
  • OpenDoor – Valued at $3.8 billion, OpenDoor has taken the Real Estate world by storm. Sellers can request all-cash offers and homes have been known to receive interest within the first 24 hours of posting.
  • Root – Valued at $3.7 billion, Root is an auto insurer that qualifies customers based on an array of 200 different variables using an app. Last year, Root expanded into renters insurance.

With how much FinTech has notably been changing the world, we wanted to take it one step further and look at the Artificial Intelligence or AI Sector as well. And here is what we found:

  • AI is being used in and for fraud detection. This would involve automatic monitoring which could in turn save banking clients hundreds of thousands of dollars each year. USAA, one of the first institutions to implement fraud monitoring, were also the first to invest in AI.
  • Natural Language Processing. In other words, the automated humans that we talk to when we call customer service lines especially in banking. Besides being completely aggravating to talk to, they’re also tracking communication patterns to be able to better assist customers.

There are challenges to implementing AI in technology, some of which involve having the experience in-house to access key data and capital to invest in the developmental process of AI.

Does this mean more and more companies around the world won’t adapt to AI eventually? While it will take time for AI to advance and reach the levels of implementation seen in the FinTech, pioneers like USAA will become the rule rather than the exception.

FinTech and Artificial Intelligence aren’t unknown terms anymore. And while the possibilities are limitless, one thing we do know is that FinTech and AI both provide the potential for globalizing, personalizing, and virtualizing financial services.

But can – and will – they be able to provide the financial stability that our economy needs?

At the end of the day, it’s gaining the trust of humans which takes precedence over anything else. Trust will eventually enhance the efficiency of information processing.

Building up a foundation of trust for financial security and firms can support the economy and society as a whole by allowing for growth in information gathering and processing techniques.

The moment this trust is dissolved, efficiency and momentum of information processing are certain to cause economic turmoil in the financial markets.

Nicky Grover

By Nicky Grover

Nicky Grover is an author and analyst for BanksBestRates.com with years of experience working in the Finance Sector for firms such as Wells Fargo, Nike and Google. Grover has specialized in analysis of budgets and revenue, economic forecasts, and executive-level financial reporting. Her work has provided her with expertise utilizing tools from Horizon 360 to Salesforce to SQL Grover earned her Bachelor’s in Communication Studies and her MBA with a focus in Finance and Economics. In her spare time, Grover likes staying up to date with current events, hiking, and spending time with her boyfriend, friends, and family.

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