We asked some of the smartest minds in finance how Wall Street is going to chang
Source: Tina Wadhwa

It's clear that technology is changing financial services at a rapid rate.

Business Insider surveyed a number of the brightest minds in financial technology, including chief technology officers at industry giants, chief innovation officers, startup founders and venture capitalists, and asked them one question:

What is the one thing that is going to change finance as we know it in the next decade?

Their answers varied, but there were a few common themes through them all.

The old models are changing, technology is automating and customizing traditional processes and the financial landscape will look drastically different in the future.

Here is what they had to say:



Debra Walton, chief product and content officer at Thomson Reuters
Thomson Reuters

If I was forced to have to pick the one significant factor that could potentially have the greatest impact on the financial markets in the future, it would have to be the application and adoption of blockchain technologies.

Pundits spread themselves across the entire spectrum of opinion on blockchain, some believing it is a non-event, others forecasting annihilation of the capital markets as we know them today.

Sitting here in my office in Baar Switzerland, in an area of the world rapidly emerging as the “crypto currency” capital of Europe – I firmly believe that blockchain will have as profound effect on the world of business and commerce as the internet, which since the mid-1990s has of course had a revolutionary impact.

The impact of blockchain will be most felt in how transactions are executed, cleared and settled.



David Reilly, CTO at Bank of America
David Reilly

Automation. Every week in the news we read about a new application for Artificial Intelligence, Machine Learning, Neural Networks, or Robots – whether it is self-driving cars, AI assistants, predictive models, robots building (or printing) hardware, or how to invest our money.

Put these all in the category of automation – and that is what will impact finance the most in the next decade.

It will change how we insure property, loan money, invest money, deliver technology, write research reports, and what professionals in financial services do every day.    Our challenge will be how to differentiate ourselves and continue to deliver value to our clients as automation moves up the stack.




Sean Park, founder, chairman and chief investment officer at Anthemis Group
Anthemis Group

There isn’t just one thing that is going to change finance as we know it in the next decade, but an accelerating confluence of a number of technological and cultural trends.

Ubiquitous mobile computing, an exponential growth in data, and continuous advances in machine learning and AI - coupled with the coming of age of the Snapchat generation - will transform finance into an always-on, algorithmically-driven industry. Delivering value to individuals and enterprises in this new world will take a very different sort of firm.


Suresh Kumar, chief information officer of BNY Mellon
BNY Mellon

I still believe that the most impactful force on our industry over the next decade will be increased collaboration across financial service companies and fintechs.

Many of the high-potential emerging technologies, like blockchain, will only be game-changers if they achieve a network effect, which means we need to work together to establish standards.

Even some applications of technology like Machine Learning or AI can benefit from knowledge sharing because they can help all of us reduce common frictions without sacrificing competitive advantage.



Mike Bodson, president and CEO of DTCC
DTCC

Blockchain, or distributed ledger technology, has the potential to revolutionize the financial services industry. Although, to paraphrase Bill Gates, we’re probably overestimating the impact blockchain will have on the industry in the next two years, and underestimating its impact in 10 years.

Distributed Ledger Technology (DLT) has gained attention in financial services because it has unique capabilities and features that could enable it to modernize the post-trade environment in areas like clearance, settlement and payments.

While the scale of US equities clearance makes it less likely to be impacted by DLT, there are areas like repo that may benefit from the efficiencies and single version of the truth it provides. I think the possibilities for impact increase tremendously when we look at ways of integrating DLT with cloud computing.



Diwakar Choubey, CEO of online lender MoneyLion
MoneyLion

Access to credit will increase broadly with the help of prediction models that utilize alternative data and technologies that enable richer relationships with customers. For example, what was once a sit-down conversation between a client and their personal private banker might now be accessible through a mobile app to broad audiences, 24/7.

Regulators, too, will begin to get comfortable with these real-time personas of borrowers, as they reduce the cost of credit for the previously underbanked and the cost of servicing bad loans for lenders. Ultimately, modern technology stacks enable it all, by delivering financing services on-demand and often for free.


Jeff Glueck, CEO of Foursquare
Foursquare

Advancements in mobile technology, especially those that allow for more precise geo location features, have already begun to impact the fintech sector. I'm confident that there's even more disruption to come in this space as investors, financial analysts and hedge funds continue to realize the inherent value in this type of geo spacial data and the deep understanding of consumer behavior that it can provide.

More than 90% of consumer spending still occurs in the real world - not online – and mobile technology is allowing us to see how and where that is happening.

Are consumers doing all of their back-to-school shopping in one store or is that consumer journey a weeks-long process? How often are consumers dining out and what types of restaurants are they frequenting? Location technology in smart phones is allowing tech companies like Foursquare to understand these big-picture trends and collect alternative data sets that can be indicative and predictive of company performance.



Jenny Fielding, managing director of Techstars Accelerator
Jenny Fielding

Artificial Intelligence and Machine Learning coupled with consumer messaging platforms like Slack are enabling businesses, including financial services, to interact with customers in new ways.

Currently, the technology enables basic automation so that making payments, checking balances and customer service can happen in real time via messaging platforms. However, as the underlying technologies mature, deep learning algorithms will minimize the need for human interaction. The impact on businesses will be profound. The current Bot-craze is paving the way for the bank of the future - an entirely virtual one!




Anand Sanwal, CEO of venture capital database CB Insights
Anand Sanwal

In the next decade, expect to see a whole new set of financial services brands supplanting many of the big financial services firms of today. There are a few drivers of this.

Some of the factors are driven by the poor reputation and practices of incumbent financial services.

        Poor tech infrastructure - The financial services industry still remains hopelessly antiquated when it comes to technology.
        Customers dislike existing financial services firms - Financial services, whether it be banks (national, regional and community ) or credit card companies, all have terrible net promoter scores. In other words, their customers don't just love them but many of them actively dislike them.
        Viewed as a dumb pipe - As a result, most clients view their relationship with their current financial services providers as "transactional"

The other driver of these changes are due to technology & demographics:

        Would rather do financial services with tech companies - Millennial customers have expressed their desire/interest to handle their financial services with the likes of Google, Facebook and Amazon. In one study, 40% said they'd be willing to bank with Google.
        Distribution is easier/faster - The other big driver of these new financial services brands are the ability for a fledgling financial services brand to build awareness much more quickly now due to things like the app store. As an example, in April 2016, 9 of the top 100 financial apps were VC-backed fintech companies.



David Klein, cofounder and CEO of CommonBond
CommonBond

Blockchain technology – the idea of a distributed ledger that doesn't require reconciliation of accounts and ensures security of currency and data – will be the most disruptive thing to happen in finance over the next decade. Possibly over the next century.

That is not meant to be an exaggeration. It will affect all areas of finance: lending, asset management, payments and more. And its impact won't be limited to just the finance industry; it will affect the finance functions inside every company around the world regardless of industry. Think of the impact that the computer had on industry. That's what we're talking about with blockchain. It's the self-driving car of finance.



Kathleen Utecht, managing partner of Core Innovation Capital
Kathleen Utrecht

Empowering financial services will take over finance in the next decade.    Everyday Americans are increasingly vulnerable to financial shocks, forced into expensive alternative financial services, such as payday lenders and pawn shops.    About half the country can't come up with $400 for an unexpected expense.    We will see the rise of fair financial products which allow people to save, get insurance, and borrow responsibly to avoid the current inefficient products.

Regulators and competitive startups will take out predatory lenders, as effective tech-enabled products will win.    You are starting to see this with successful startups such as Opportune and Payjoy (both Core portfolio companies), which using technology to do nonprime financing at a fraction of the cost of incumbents.    We see the rise of savings and investing products such as Digit and Honest Dollar (another Core co) and more startups than ever tackling insurance.

There will be an increase in liquidity management and talent marketplaces helping the 1099 and part-time workers get enough shifts and get paid quickly to make end's meet.    You will also see the rise in financial infrastructure deals to make all of this possible.



Dean Nicolacakis, co-leader of US Fintech at PwC
PwC

We think financial services provided in a more seamless and native fashion into day-to-day life will be a profound change throughout financial services over the next decade.

Many financial services—particularly consumer and small business—will be embedded directly into the user activity itself as a native, not a separate, function.

We have seen this in certain areas, including in payments (web commerce or ride hailing) where the economic activity is directly embedded within the user activity; in P2P money transfers, especially among younger generations, where money movement is inherent to the social and/or commerce activity; and even in small business where select accounting capabilities that were formerly separate (payroll, inventory, or budgeting) are now a seamless aspect of operational banking services. Over time, we expect this native inclusion of the financial function to permeate other areas such as assimilating the mortgage with the home buying experience or providing instant credit at the point-of-sale.




Maria Gotsch, president and CEO of Partnership Fund for New York City and cofounder, FinTech Innovation Lab
Partnership Fund

There will be a handful of fintech companies with new business models that will scale to compete with the existing large financial institutions.

However, given the capital and regulatory requirements to do that, a larger number of fintech companies will end up partnering with those existing financial institutions, or be acquired.

The winning partnerships will be between 1) those financial institutions that figure out how to onboard externally developed innovation more quickly and seamlessly than their competitors and 2) technology companies with financial backers that have the resources and patience to wait out what will still be a sales cycle or partnership discussion that is longer than desired or expected."




Chae H. An, vice president and CTO, Financial Services Sector, IBM
IBM

Cognitive technology and artificial intelligence will be embraced by banks over the next decade. While this technology is still early in its maturity, we are beginning to see it used by banks to support more personalized client interactions.

The use of cognitive computing will grow in the areas of regulatory compliance as well as cyber security applications. With the ability to automate tasks, understand, reason and learn by ingesting information and regulations, it can help banks determine obligations more accurately and more quickly.

The technology continues to evolve through better learning algorithms and through training on how to use large sets of disparate data sources within banks.



Jon Stein, CEO of automated wealth platform Betterment
Betterment

Over the next decade, the industry will become more advised. Instead of being sold financial products (like life insurance), we will rely more on customer-aligned financial services companies to advise us on what we should be doing with our money and when.

When I think about how my daughter will manage her money when she gets older, she won't have to worry or think about what she should be doing with her paycheck. She'll be able to trust a company to automatically allocate her money appropriately. It'll tell her how much she should be investing and in what accounts, it'll pay her bills and do it out of the optimal account, it'll tell her when she should start thinking about things like life insurance and so much more.



Bo Lu, cofounder and CEO of online investment manager FutureAdvisor, acquired by BlackRock
Blackrock

FinTech will help everyday consumers to get relevant, customized, actionable information as part of a truly holistic financial plan that factors in everything from investments to insurance and healthcare spending.    Technology will also continue freeing up human financial advisors from mundane tasks so that they can focus on providing uniquely human value, like coaching and mentoring.

This increased communication between financial service providers and consumers will help financial companies to develop offerings that are more consumer-centric and appealing; tailored to individuals instead of mass-market solutions.    And personalized recommendations and analysis will help demystify financial products for consumers, making it easier than ever to know how you're doing and when you're making the right decision.

In the next decade, financial products should serve consumers as unique individuals better than ever before.