In a rapidly changing world, it’s important to stay ahead of the curve. Especially when it comes to something as important as how fintech is impact the future of money.
Many experts think the future of money is going to look very different than it does today. With the rise of new technologies like cryptocurrencies and contactless payments, a lot of changes in how people use and store money is expected.
Here are twenty-two quotes from top experts, exploring their thoughts and predictions on the future of money. Read on to get ahead of the game!
Over the last two years, the need for digital currencies has been driven by the rapid digitisation of global economies, the prioritisation of real-time payments and settlements, and the need for more efficient domestic and cross-border monetary interactions.
The International Monetary Fund (IMF) recently stated that centralised technologies, such as cryptocurrencies and central bank digital currencies (CBDCs), can reduce expenses, facilitate a seamless flow of money, and provide consumers with safer access to capital through digital channels.
Ultimately, digital currencies can provide a more resilient payments landscape, supporting competition, efficiency, controls and innovation in payments. They would also address declining cash usage by improving the usability and availability of legitimate central bank money.
The future of money is rooted in increasing access to the financial services system for more people — and beneath it is the underlying holy grail, which is data. Access ensures that anyone is able to actively participate in financial systems, by building relevant financial products and services that engage all communities and match their lifestyle needs. Ultimately by expanding access and with new fintech innovations, we can provide people and businesses with agency across their entire lives — enabling them to be fully in control of their financial lives. Fintech and other technologies can offer people healthier options, granting them decision power and security in their everyday lives.
But data is critical to this expansion of access. For example, APIs enable the flow of data in banking, such as accounting information for businesses, which is a great example of this movement. Consumers can benefit from sharing new forms of alternative data, such as device and location data, that helps lenders make more informed and objective decisions about people’s ability to pay off loans and granting other forms of access to capital. Access to ESG data provides a more robust understanding of businesses and a deeper understanding of their value.
Data is everything when it comes to the future of money. But to solve complex challenges and catalyse change through fintech innovation, we need to look beyond traditional data sources and instead focus on seemingly convoluted or hard-to-get data sets. It is non-traditional data that will allow us to identify patterns and areas for improvement, and ultimately build products that make actual difference.
Traditional payment methods will always have a role to play in how we conduct our financial lives, but the future of money lies in digital payments. The financial market is constantly evolving, and digital currencies are becoming more influential, with shoppers calling for new innovative ways to pay for their products. Digital currencies are the next evolution of payments, but that needn’t be at the expense of cash. Instead, we will see the merging of cash and crypto, allowing people to switch between the two currencies seamlessly, regardless of location.
But if this is to become a reality soon, then the financial industry must go some way in simplifying crypto processes to remove the scepticism that surrounds it still. Educating new crypto users is the key to the wider adoption of crypto payments in everyday life. The successful merging of cash and cryptocurrencies for both consumers and businesses alike will complete financial transactions in a new way.
Overall we’re going to see more competition in the market between SWIFT and alternative rails, buy-now-pay-later vs credit cards, and between various currencies like crypto and CDBCs.
We’ll continue to see the adoption of other real-time payment schemes and CDBCs as SWIFT loses some of its foothold as the go-to for cross-border payments beyond a certain value.
There has been an increase in technology systems that are more network agnostic, connecting to SWIFT as well as other payment networks like Mastercard Send or Currency Cloud. Some of these systems can also simultaneously connect to companies like Ripple, who are offering tokenised crypto coins.
Common, industry standards for sharing consumer financial data, like those from the Financial Data Exchange (FDX), will be instrumental to how we use and track money moving forward and must keep up with the pace of market innovation. There must be a way to securely and uniformly share digital information about money—who does the money belong to; how much is there; what is the bank location. To be secure, transparent, and reliable takes coordination and standardisation of secure connections, formatting and user experience.
The future of money is digital. Money is the grease in the machinery of a smoothly functioning economy. As our economy becomes more digital with commerce, communications, transactions, and contracts all rapidly becoming digitalised, money will naturally follow suit.
The digital transformation has already happened through banks and modern payment systems which represent private money. The same transformation will soon happen in the realm of public money in the form of central bank digital currency. The digital future of money is inevitable.
7. Chirag Patel, CEO of Digital Wallets at Paysafe
There is no doubt that fiat currency will dominate for the foreseeable future. However, it is likely we will increasingly see electronic fiat payments work in parallel with cryptocurrency, and mainstream payment systems evolve to take advantage of the technologies underpinning cryptocurrencies.
According to Paysafe’s independent research released in December 2021, nearly half (48%) of businesses say they are committed to accepting crypto payments in their online checkout as quickly as possible, and 53% say they either already accept crypto payments or plan to offer crypto payment options in their online checkout in the next year.
To accept crypto payments, businesses need the process to be significantly simplified. They shouldn’t have to worry about cryptocurrency price fluctuations, deciding which cryptocurrency to accept and how to convert to fiat – all of that should be handled by their payment provider.
The most logical first step towards paying with, or accepting cryptocurrency, will be utilising stablecoins as they are designed to have a constant price, confirm payments rapidly, and are typically 1:1 backed with a specific fiat currency.
We are currently experiencing the biggest innovation push in the financial sector in our lifetimes. Unless banks transform their approaches, it will be increasingly difficult for them to maintain their grips on deposit taking and lending. In fact, banks will become less important as blockchain technology and decentralised finance intermediation becomes more widespread.
The rise of fintech democratises this process and gives unbanked or underbanked consumers access to tools they did not have before. Even the banking industry’s stronghold on payment processing is being challenged by fintech start-ups that allow their users to transfer funds on a peer-to-peer basis. The biggest thing that could slow this financial revolution down is the lack of regulatory clarity. Regulators have initially been hesitant to introduce regulations for a trend that was seen as a fad. However, now that the trend has grown, regulators and law makers seem to be in a race to introduce a regulatory framework that makes sense, and at the same time does not choke off growth prospects for the sector.
It’s time to rethink our relationship with gold. Gold has always been the safe haven asset of choice amongst prudent investors and now, thanks to technological advancements, gold can be used as currency with utility and accessibility as well as paying yields. A monetary system based on precious metals would be one such sanctuary that would allow us to stop irresponsibly adding to the growing pile of money, bonds and debt, and move us to a system that centres on real tangible value.
The future of money will include technology and services that allow heightened transparency to inform better investment decisions. Movement away from legacy systems such as spreadsheets and 30 year old software and harnessing the power of SaaS solutions to streamline workflows will reduce fees while at the same time enhancing the client / investor relationship further without additional headcount or effort. As wealth managers look for tools that foster relationships between the client and advisor in a world with permanent hybrid models, these platforms are the way forward.
11. Derek Muhney, Executive Vice President at Coinsource
As the world of cryptocurrency becomes more mainstream, some may be wary of what the future may hold for money. I am confident in stating that easy payment systems and financial services such as Bitcoin ATMs will begin to take charge and forge a path forward.
The vast majority of individuals know how to utilise an ATM for fiat currencies but may not be aware that these same services exist in the crypto world and are widely useful as they break down barriers and enable individuals to be a part of this revolutionary new industry. Our Coinsource kiosks provide simplified and secured access to the world’s leading digital currency and as we grow, so will the industry.
Many of the most popular new digital investment products, from cryptocurrencies to NFTs, have been touted by advocates as not only harder to steal than fiat cash but also largely impervious to common cybersecurity risks.
In a vote of confidence for these assets, Fidelity this week began offering 401(k) investors access to Bitcoin, and BlackRock listed a Bitcoin ETF days later. But while their champions have assured investors that their existing, decentralised cybersecurity infrastructure can adequately protect these assets from theft, the millions of dollars’ worth of crypto stolen this month via identity fraud and private key and password hacks signals that this new investment arena is far riskier than advertised.
So, the future of money will still likely bend toward digitisation, but it may also be riskier than traditional assets for retail investors and financial institutions alike until the sector prioritises security and invests in more effective cyberinfrastructure.
The pandemic certainly altered the default payment method of choice for many people away from physical cash. The use of physical cash may diminish over time but will likely never fully go away.
A truly cashless society, where we assume there is no standard physical representation of value whatsoever feels a little far-fetched. But if it was the case, I would expect there to be such a highly developed internet and communications network to the point of appearing like magic to us. This would be required since it would need to work in all scenarios, without fail otherwise the society in question would need to create a physical contingency in the event of an emergency. Nevertheless, it’s crucial that we continue to strive for a digital cashless society and provide solutions that help to close the financial inclusion gap.
In the future, I believe central banks will produce new stable coins that will run on a hybrid of centralised and decentralised networks. Blockchain technology will power those networks. The market will be completed by a marriage of cryptocurrencies and NFTs. NTFs will provide the capacity to transact assets (such as homes and land), while crypto will provide the means to deal on a larger scale.
The number of scams will be minimised as regulations will be put in place to ensure the security of these transactions.
Cryptocurrencies are reshaping economies throughout the world. As a society, we can only move as quickly as our slowest individual or market, which has been a barrier in transitioning to a frictionless currency. Corporations and governments alike are attempting to comprehend the transition from a stable currency backed by government to the possibilities of new financial assets that appear to require a degree in mathematics to comprehend.
Many people assume that transforming money would alter the way we live, but I believe that we must transform money to suit the way we want to live or the way we presently live.
Cash is inefficient, expensive to manage, hard to track by both private and public agents, and requires an individual to travel to wherever their payment needs to be made. In addition to convenience, going cashless helps verify completed transactions, therefore reducing theft and fraud. It also reduces the expenditure incurred in the printing/minting and transportation of notes and coins, and curbs corruption, while also making it much more difficult to conduct money laundering. With the growth of technology and a population that is able to easily adapt to digital platforms, going cashless can also help the unbanked and underbanked access eCommerce and digital financial services, improving financial inclusion as a result.
Put simply, a cashless system can help increase financial access and inclusion for consumers. Many emerging markets are lacking the legacy financial infrastructure of more ‘established’ markets. In META, for example, limited consumer access to banking infrastructure means that traditional transactions based on credit and debit cards are not a realistic prospect for many. However, with smartphone penetration growing apace, and with it the ability and desire of MEA consumers to purchase goods and services through digital channels, there is an increasing need for alternative payment methods to support access and consumption.
However, businesses also benefit from the reduced cost of managing digital transactions as opposed to cash.
Lockdown forced millions to take a crash course in digital access to connect to financial services and bank accounts, which accelerated an already established trend — that customers are defaulting to online services.
Digital banks continue to keep traditional institutions on their toes and to maintain their competitiveness, they must review, revise and enhance the experience they provide customers from the onboarding moment and throughout the user journey.
A fundamental part of this evolution towards digital finance is helping people access their money easily but securely. With one in three customers now opting to open bank accounts digitally, financial institutions must reflect these behaviours if they want to remain relevant.
Forward-thinking banks are already putting digital identity verification at the heart of this frictionless onboarding experience. Immutably tying identity documents to a real-life human ensures the validity of an individual’s identity and facilitates interactions with digital financial services while mitigating the risk of fraud. For example, biometrics is one of the leading methods to verify customer identities quickly and accurately. It’s also favoured by customers – as many as 52% would rather use biometric checks when opening a bank account. As the future of money becomes more borderless and moves away from dependence on physical branches, verifying customers’ online identities accurately while maintaining a premium user experience will be crucial to make digital finance scalable.
I believe money will become less tangible, to the point where physical cash payments are rare and the exchange of currency becomes frictionless. Digital payment methods are currently enabling this by facilitating purchases that can be made anywhere, anytime, and on any device. Fintech will continue to mature with innovation focused on offering new and secure ways to make payments in real-time or as part of deferred payment plans.
The future of money is intrinsically tied to the future of our planet. Australians are not only concerned about climate change, they’re becoming increasingly aware of how their money is being used by financial institutions. Everyday consumers are looking to build their wealth, but not at the expense of their beliefs.
Customers have a myriad of options for banking, investing and loans at their fingertips with information on how these organisations operate becoming more available everyday. These organisations need to not only be transparent to win hearts and minds, but also present real plans to customers that create a positive environmental change without losing out financially.
The financial technology industry is rapidly evolving. Personally, I believe the future will rely heavily on “set it and forget it” type platforms as they are easy to use, eliminate the usual pain points and empower the average person to enter the space. Utilising these safer platforms that handle digital assets will ease discomfort and lessen risk. As this somewhat complex industry takes lead, the general public is definitely interested in how this will affect them personally. These hands-off platforms, like Stacked, aim to be the “life jacket” that saves the masses from these challenges by providing a trusted route to safely manipulate digital assets.
In ten years there will be little need for the average individual to have a bank account as we know it today. The catalyst for such structural change is the emergence of open, more distributed financial systems.
Digital assets, or cryptocurrencies, are a prime example of these new systems. Whether it be something like bitcoin or a central bank-backed digital currency, their distributed digital nature fundamentally changes what support system is needed to protect the value of the currency itself.
An individual may want a digital custodian to protect and secure a digital asset’s value, but how many of the +5,000 U.S. banks have that capability today? There is major change ahead. This structural shift to a digital asset foundation will provide revolutionary opportunities to recreate our financial economy and build something that hopefully empowers the world’s real economy for future generations.
It has become increasingly clear that the future of money will be fueled by crypto. Bitcoin has proven to be the best store of value over the last decade, vastly outperforming the S&P 500 during this period. Particularly as the dollar, the de facto ‘global currency’ is afflicted by worsening inflation, causing worldwide economic disruptions, bitcoin will soon surpass the dollar as governments and institutions grasp its immense utility as a disintermediated, truly global currency.
Governments and companies across the world are quickly realising bitcoin’s transformative power to make payment rails more efficient, accessible, and secure for all. We’ll continue to see exponentially more innovation in bitcoin, allowing using bitcoin as a currency and payments rail to reach unprecedented scale and mainstream adoption.
In the past, money and wealth were very much a physical thing. With the traditional financial system, you owned physical assets, and needed to deposit cash in person at a bank.
Emerging financial technology (fintech) companies have accelerated the future of money by working to improve different aspects of our financial lives. They have digitised parts of the traditional financial system (e.g. payments & investing), and spurred the creation of the decentralised system (e.g. cryptocurrencies, digital assets).
Today, the traditional financial system and decentralised financial system are still fragmented, and not connected. It still matters which bank your money is in, where you buy and sell your investments, and which wallet you use for your cryptocurrencies and digital assets. Technologies such as open banking connect these systems and will drive the future of money.
Tomorrow, I see a future where the traditional financial system and the decentralised financial system will merge, building on open banking principles so that people can access their money anytime, anywhere.