Financial Markets have historically been unpredictable, and fortunes have been lost and gained through their manipulation. Navigating large amounts of money is no walk in the park. Just ask these 10 pro athletes.
As times have changed, it seems that the financial sector has only become more volatile and prone to abuse.
But, sometimes it’s darkest just before the dawn. It seems that this variability, which many companies harness for profit, is being neutralized by new technologies. These developments are flipping the financial industry on its head, and not extinguishing it, but radically updating and transforming it.
In this article, we discuss the future of finance, focusing on 4 areas that we think will undergo the most amount of change in the future.
We think cash has been an antiquated tool for quite a while. It’s unsanitary, brittle, and inconvenient, and can be easily stolen by thieves. If you want to avoid hoarding your hard-earned dollars beneath your mattress, then the only other option is to trust a bank.
But then, before you know it, you’ve opened up 7 credit cards, taken out 3 loans, initiated a 401K plan, invested half of your wealth in the stock market, and are paying more money in monthly interest than you make from your salary.
The future of finance involves cashless exchanges via cryptocurrencies like Bitcoin. These digital systems are decentralized and offer complicated algorithms to prevent theft and deceptive manipulations by large banking corporations. While they are currently unreliable, eventually we think a tipping point will be reached. This will turn banks into commodities rather than necessities.
As banks become secondary, funding will become more personal than ever before. Companies like Kickstarter and Patreon already empower creatives to ask anyone that might be interested to fund their ideas, which is leveling the playing field for artistry and production.
The popularity of these platforms is threatening traditional venture capital firms who offer less flexibility when it comes to future repayment. With companies like Kickstarter and Patreon, the creator or owner can determine the level of involvement of his investors.
Additionally, the entire industry surrounding funding projects is shifting as artists become empowered to manage every step of their process.
For example, the musician Chance the Rapper has begun to release much of his music for free, and despite his popularity, is not signed to a record label. These transformations in finance will only continue in the future as new technology makes it possible to turn your room into a professional studio.
When most people think of artificial intelligence, they imagine changes in entertainment and architecture, providing more pleasure and enjoyment to life. Perhaps they even imagine medical advances that increase longevity. But, rarely do they think of financial advising and role of AI in customer relations.
However, this is where the future of finance is heading. Innovations in finance will occur over the internet, where individuals will be able to consult with internet bots concerning their portfolios and wealth.
Additionally, going to the ATM or sitting down with a banker will be a thing of the past, especially when you can just skype with a robot who has access to every stock market fluctuation of the past 100 years. Technology will allow individuals to leverage historical market information in a way that will mitigate loss.
The future of finance also entails changes in the insurance sector, as new technologies minimize many traditional accidents that insurance companies are designed to cover.
For example, health insurance is predicated on disease and illness, but in the future, many traditional ailments will likely be cured.
This doesn’t mean that there won’t be death, disease, or accidents – only that insurance agencies will become more specialized. Instead of health insurance, there will be exercise insurance, or GMO-fed Beef insurance, or secondary smoking from John Doe insurance. Companies will be able to use technology in unprecedented ways to uncover information about the nature of our imperfections.
When you think about, in a future utopia, there shouldn’t even be insurance, as we won’t even be concerned with the future, but will be firmly rooted in the beauty of the present moment.
Our Final Thoughts on the Future of Finance
We think that the world is going to change significantly in the future and that the finance industry is going to be shaken up.
Banking will become decentralized, fraud will be minimized, funding will be personal, and consulting will be nonhuman, and everything will be funneled through the portal of the internet. Even further, we think the quality of life will be so high that the insurance industry will be unrecognizable and unimaginably different.
As long as you don’t get too attached to the past, these changes will only be positive. However, if you become dogmatic and consumed by regret, then the future of finance might be dramatically difficult to handle.