The incredible capacity of global monetary networks is only made possible by evolving, innovative technologies that connect parties around the world and create never-before-seen financial instruments.
As finance and technology continue to coalesce, the rise of new asset classes is set to change the industry forever.
As three out of every four Americans now use their bank’s mobile app to meet their everyday banking needs, the number of visits to physical banks has dropped 36% over the past five years.
Leveraging technology, fintech lenders now have access to data acquisition and analytic techniques that process loans in as little as 24 hours.
New investors are three times more likely to rely on invest-tech mobile platforms, and millions of Americans downloaded trading mobile apps just during January 2021.
As business activity continues to shift to these extended ecosystems, it’s estimated that 75% of businesses will leverage digital platforms and use them to adapt to new markets by 2025.
Fractionalization — the act of taking an asset, digitally breaking it into smaller pieces and creating a virtual marketplace for those pieces — is driving accessibility across every investment asset class.
Using digital investment platforms, investors can lend money to small businesses, buy future music royalty rights, even invest in future hours of people’s time.
With industry forecasts projecting alternative assets as a $17 trillion industry by 2025, many believe the growth in alternative asset investing is just getting started.
Portfolios that allocate even a small portion of their holdings to alternatives have historically generated higher portfolio returns and reduced portfolio-wide volatility.
The rise in the number of alternative investments and the accessibility to these opportunities has led many to believe traditional portfolio allocations are outdated.
Meanwhile, two out of every three banking customers want to see their financial institution become more sustainable — and half of all customers are prepared to leave their bank if progress towards sustainability doesn’t happen.
Almost all REITS — regardless of market cap — are beginning to place a high emphasis on ESG reporting, while other real assets that prioritize sustainability are seeing growth in opportunity and demand as well.
Another fintech trend is direct indexing, which is the idea of replicating a fund by directly purchasing the same weight of stocks as the underlying index.
During a time when there’s more carbon dioxide in the atmosphere than at any other point while humans have walked the Earth, the intervention of technology and finance is a beacon of hope where investors can easily use fintech and digital platforms to begin impact investing.
As the planet continues down a path of irreparable change, people are taking notice as more than half of investors are willing to sacrifice some portfolio return to achieve an ESG goal.