This year has been marked with both significant advances in technology within the financial sector, but also widespread uncertainty due to a number of political factors including Brexit and the U.S. midterm elections. Whilst the political environment the financial sector will face next year remains uncertain, industry insiders have given us their forecasts for what is to come in terms of innovations within the sector, and how security and marketing providers will be keeping up with the changes in the market over the next 12 months.
Blockchain technology is set to enter a new era in 2019, with many industry experts expecting the technology to be more widely adopted by mainstream companies, charities and financial organizations. There are promising technological advances in other sectors that will allow blockchain to play a more prominent role in everyday life.
I believe that in 2019 we will begin to witness more acceptance of blockchain based financial offerings. I estimate that more and more strong projects will position themselves as a ‘foot-in-the-door’ option for traditional investors, making investing easier than ever before, but in an above board and legally compliant manner.” – Frank Wagner, Co-founder and CEO of INVAO
We’re dealing with extremely futuristic propositions here and there is work to do. We must strive to meet industry challenges, such as the lack of formal blockchain education and the need to keep attracting top talent into the industry. Most importantly, however, the blockchain industry needs to continue driving the technology’s research and development and share their cumulative knowledge through a strong, global open-source development culture. I believe the disruption this technology will bring won’t be fully realized over the course of just one year.” – Max Kordek, CEO and Co-Founder of Lisk
I expect a level of maturation within the blockchain space in 2019, with sustainable blockchain projects on the rise. In the coming year, I envision more steady progress as dedicated teams continue their tireless efforts to deliver exciting projects that disrupt stagnant systems, built to address a range of in-efficiencies across a variety of sectors.” Nick Cowan, CEO of the Gibraltar Blockchain Exchange
The two biggest areas we’re seeing interest from enterprises in applying blockchain are finance and supply chain. We’re already seeing strong progress there in the form of Hyperledger, Ethereum Enterprise Alliance, and Corda. It can be expected that in 2019, corporations will invest additional time and resources in determining how to optimize portions of their businesses through the decentralization and transparency that blockchain offers.” – Luka Horvat, Head of the Developer Vertical at Toptal and Blockchain Engineer
Progress in the Artificial Intelligence sector is set to transgress the industry, with advancements being used in Blockchain and in cyber security amongst other areas. Companies are set to use AI to enhance customer experience and potentially reduce running costs in certain areas of their operations.
Throughout 2019, we will continue to see an increased use of AI and machine learning to improve customer experiences, whether it is the use of enhanced chatbots to facilitate quicker client assistance, or the use of imaging recognition software to provide hyper-targeted marketing based on age, sex, and even temperament”. – Brent Jaciow, Head of Blockchain Affairs at Utopia Music
Use of AI is going to increase in 2019. Among other benefits, artificial intelligence, and especially machine learning algorithms, can capture, analyze, and categorize data faster than human workers; this gives companies using AI the ability to identify patterns and use this information to optimize existing systems, or create new systems that solve problems unseen until machine learning software revealed the inefficiencies.” – Dustin Plett, Chief Strategy Officer | Consensus AI
2019 is going to be the year of the biometric…when as citizens, we move beyond cash, plastic cards and devices. Using our individual uniqueness, traits that have been ours since birth to prove who we are quickly and efficiency. The next vital part of this journey is to ensure we all have control of our identities, a basic human right, we have the right to remain anonymous, we retain the right to be forgotten.” Nick Dryden is CEO and founder of Sthaler | Fingopay
Tokens and coins
Security tokens are set to be the biggest trend in terms of coins and tokens in 2019. The more secure version of other online currencies is set to be more attractive to mainstream investors and it is hoped they will bridge the current disparities between coin investment and traditional forms of investment.
Blockchain technology will continue to silently pervade fintech as an inexpensive, reliable, and secure layer inside of existing networks and enterprise. Emerging technologies such as AI, Big Data, and IoT will be enhanced by blockchain, creating both tokenized incentive layers to crowdsource information, as well as secure distributed information pipes to route data. In particular, blockchain’s ability to create tokenized/monetized data markets for all of these sectors will accelerate growth. In 2019, watch for the rise of security tokens, which are regulated asset-backed tokens, to boost the economy and bridge the gap between crypto and traditional investment banks, asset managers, and investors. Security tokens provide the traditional finance industry with a way to leverage their capital and expertise in the crypto sphere. Online gaming and digital assets will also graduate to mainstream crypto adoption as seen by companies like $10bn Korean gaming giant Nexon buying two crypto exchanges.” – Jehan Chu, Co-Founder of Social Alpha Foundation (SAF) and Co-Founder and Managing Partner of Kenetic Capital
Security tokens are an exciting trend in finance which, even though in an early stage, is creating more buzz in the finance industry than anything I’ve seen before in blockchain. Imagine having a common protocol between all financial firms in the world so they can seamlessly transfer assets to each other compliantly – creating a truly connected global and pro-consumer financial services industry. The implication is that local and national liquidity pools (i.e. wealth) will turn into global shared liquidity, which can help fund world scale projects as they become needed in the future.” Jaron Lukasiewicz, Founder and CEO of Influential Capital
The token model is going through a shift. Companies are realizing that not all projects need tokens and STOs with real asset backing will become more prevalent. Also, we are seeing innovation in the form of buy-backs and other incentives to help mitigate the declining market for token holders. I expect to continue to see more of this.” – Atsushi Hisatsumi, Founder of marketing and blockchain launch agency, Extravaganza.
Governments and financial institutions across the globe have been looking at blockchain and fintech over the past months and assessing how best to regulate the new market. Industry insiders have said they expect 2019 to be the year when the industry becomes more stringently regulated, which will both pose challenges to companies operating within the space, but also offer an opportunity for innovation and development.
The main obstacle the industry will deal with in 2019 is regulation playing catch up. With fintech innovation moving at warp speed, the industry must adapt and have an open dialogue with regulators to ensure progress does not grind to a halt. In Capitalism 3.0, innovators must see regulators as their partners, and include them early and often in discussions in order to establish a sense of understanding and get the guidance from said regulatory bodies on a pathway forward which makes sense for all parties.” – Brent Jaciow, Head of Blockchain Affairs at Utopia Music, the blockchain-powered music tracking and attribution platform
My prediction is that the industry will shift its focus toward the real-world problems that blockchain technology can solve, rather than obsess over the success or failure of specific coins, or the up and down of the market. In 2019, my hope is that we apply the technology not only to the legal sector but to the myriad of industries that can and should benefit from its transparency, speed, efficiency, and reliability.” – Casey Kuhlman, Co-founder and CEO of Monax
2019 will also see a bloom of regulatory clarity following from both the US SEC and Hong Kong’s SFC’s recent guidance, adding structure and pathways to legal and compliant operations of crypto businesses. These clear frameworks have been desperately needed by the industry and will give clearance for professional operators to work openly.” – Jehan Chu, Co-Founder of Social Alpha Foundation (SAF) and Co-Founder and Managing Partner of Kenetic Capital
The new era of “Capitalism 3.0” is offering its own new set of challenges that are being addressed by cybersecurity operators. The threat from cyber-attacks is real and has been listed as one of the biggest threats to businesses in the current day. Operators look set to offer new solutions for transferring virtual assets safely, as well as using new technologies including Blockchain to hold data securely for clients.
According to a World Economic Forum study released earlier this month, cyber attacks are now seen as one of the biggest threats to doing business. With this number on the rise, it is imperative that cybersecurity is strengthened, and I believe we will see increased scrutiny on security solutions for fintech companies. Trust is the currency for the financial services industry, and fintech and financial service businesses that cannot afford in-house security solutions will need to partner with companies focused on end-to-end data encryption to ensure the safety of their clients’ data.” Robertas Visinskis, Founder of Mysterium Network, an open source, not-for-profit foundation focused on security and privacy
We expect to see continued consolidation in digital asset exchanges in 2019, as well as a flight to quality in digital assets. The arrival of Bakkt and Fidelity will bring much-needed improvements in transparency and security, including safeguards against wash-trading and other forms of market manipulation. Investment will continue to rotate out of the utility token space and into digital assets with a clear use-case (e.g. XRP and cross-border remittances). Security tokens and tokenized assets will roll out, albeit more slowly than the industry would like. These developments, coupled with more regulatory clarity (aided by industry SROs), should encourage the entry of institutional capital and welcome crypto as a legitimate new asset class.” – Cristian Gill, Co-Founder of GSR
Based on years of experience in the payment market, I can see that there is a growing need for advanced customer verification in the fintech and banking area and for creating a new perspective for KYC and AML processes. Moreover, we’ll see more bank/fintech partnerships, mostly driven by PSD2. This is also related to investment in tech, as, still, the majority of banks are not prepared to cope with fintech due to legacy systems.” – Lucas Jankowiak, CEO of SecurionPay
Marketing within the financial services sector is evolving to keep up with the extensive innovations in technology within the industry. New ways of investing including cryptocurrencies have a clean slate in terms of customers’ perceptions of them, free of any preconceived ideas carved out by financial crises in the past. The market is open and marketers are exploring how to use this to the full advantage of both established companies and startups alike.
Financial services start-ups tend to see most things as tech problems, but a build it and come mentality won’t work. Instead, there’s an unenviable marketing task at hand. They cannot rely on decades of brand equity, they do not have pre-existing relationships with potential customers, and worse still, they may have a product that the market doesn’t understand and doesn’t know how to describe – ensuring those that get it right will end up leagues ahead of competitors.” – Mike Teasdale, Founder and Planning Director at Harvest Digital
Today, 6 billion – or 84% of the world’s population – live in emerging markets, and 2 billion of these individuals have been financially excluded from traditional financial institutions. I believe that as more people begin to embrace and invest in Blockchain solutions, we will see that this technology has the unprecedented capability to reach these markets, giving investors large and small access to the real global economy.” – Craig Mc Gregor, Co-founder and CEO of DSTOQ
After a wild two years of token sales, blockchain projects are starting to realize that effective growth marketing takes time, trust, and branding. User and customer acquisition have always been some of the biggest startup challenges and for blockchain-backed fintech companies this means understanding the product-market fit and marketing to the appropriate audience. 2019 should weed out the serious companies from the get-rich-quick schemes” – Jared Polites, Venture Partner at BlockTeam Ventures.