Lloyds Banking Group Fintech Investment Director, Kirsty Rutter, presented 5 trends in fintech at the end of January. She, of course, reflected on the diminished value of crypto investments, but she thinks it’s more important that we look at the technology behind crypto. Trends are therefore, for example, blockchain for digital identity, web 3.0 and the creation of laws and regulations around crypto.
At the beginning of 2022, fintech was booming, Kirsty Rutter writes, but investments have since fallen sharply in value. Figures from KPMG show that fintech investments fell to $9.6 billion in the first half of 2022, while $27.8 billion was spent in the same period in 2021. Despite these plummeting numbers, fintech continues to develop, according to Rutter who defined five trends.
Reaching the wider audience with fintech
Two trends that Rutter defined revolve around inclusivity and closing the digital divide between generations. According to Rutter, both are necessary to increase the acceptance of fintech throughout society. “It is particularly worrying that 10 million British adults do not have access to the internet themselves. And 11 million people lack the digital skills that are now needed in everyday life, according to data from Lloyds Bank,” Rutter writes.
Another trend is the development of digital currencies and blockchain, with an emphasis on regulation and the use of blockchain. As Rutter writes, “We are likely to see lawmakers get closer to cryptocurrency – they may be able to create global regulatory policies. At least, that idea is now being discussed.” But the real value is in blockchain technology, according to Rutter.
Added value of blockchain
While crypto has gained a dubious reputation, blockchain has proven to be of real value. Rutter expects more financial organizations to invest in blockchain technology or related fintech in the coming months and years. A trend that ties into this is digital identity, where blockchain helps to prove that people are who they say they are on a digital device.
The last, but no less important trend that Rutter defines is the further development of the internet to web 3.0. It revolves around decentralization and is based on blockchain and a token-based economy. The focus is on spreading ownership among the users of, for example, a community or product. This principle is already being applied in web3, but web 3.0 will probably take longer until everyone is connected to these decentralized principles.
