The Future of fintech? Blockchain, crypto currencies and more

CHAPEL HILL, N.C. – There’s no crystal ball to reveal what the future of fintech will look like.

Of course, that doesn’t stop leading business leaders and academics from speculating.

On Thursday, more than 150 people packed into the Kenan Conference Center for a symposium on the ever-changing landscape of Fintech, tackling everything from blockchain, cryptocurrency and more.

Frank Hawkins Kenan Institute of Private Enterprise director Greg Brown. CREDIT: Steve Rubin/Kenan Institute.

Organized by the Frank Hawkins Kenan Institute of Private Enterprise, the event’s aim was to provide guidance on how emerging technologies will affect business and policy moving forward.

Here’s some of the highlights:

Crypto what?

It’s probably fair to say that most in the general population are still trying to wrap their heads around the concepts of cryptocurrency and blockchain. Who knows, the same may even be true for those already in the financial sector.

“Crypto what?” Catherine Coley, Ripple’s head of XRP Institutional Liquidity, half jokingly asked the audience in her remarks opening the symposium.

(For the record, crytocurrencies – like bitcoin — are a digital or virtual currency that use cryptography for security. Blockchain is the technology that enables the existence of cryptocurrecy by providng a decentralized ledger of all transactions on a peer-to-peer network.)

At Ripple, the company is using the digital asset, XRP, run by blockchain technology, to move money globally. As Coley sees it, and many others in the know, this is the future of banking.

“Ripple has the mission to move money the way we move information today,” she explained. “How fast can we send an email today? Pretty quickly … How fast can we pay for things that we ship around the world through an email? Not that fast. That’s really where Ripple’s idea came from.

In the future, people will be able to send and receive money globally within “three seconds”, she said.

“Ripple builds payment software programs that would allow for the world that we know – traditional finance – to play catch up to the world that we hope to build. This is great for payments, and there’s still things that we can build on top of this,” she said.

Ripple’s Catherine Coley. CREDIT: Steve Rubin/Kenan Institute

Last June, Ripple selected the Kenan Institute, together with UNC Kenan-Flagler Business School, as one of 17 institutions to take part in its $50 million University Blockchain Research Initiative, focusing on financial policy in the crypto and blockchain space.

“We’re really seeing progress taking place,” Coley said, “and we’re excited for UNC to kick off a lot of the forefront that we need in terms of understanding the tech behind it.”

Apple Pay is the future – just not now

As for the here and now, a panel of experts — moderated by UNC Distinguished Professor of Economics Eric Ghysels – tackled a number of topics related to the crypto and blockchain space.

Among them: the relevance of a digital wallet service like Apple Pay.

“I’m shocked still today when I talk to people who consider themselves fintech savvy, who really aren’t that familiar with Apple Pay,” said panelist Mike Maguire of SunTrust Bank.

Most agreed, however, that it’s only a matter of time before it takes over the market.

“Apple could be the biggest bank. Square could be the biggest bank,” said Alex Adelman, co-founder of Lolli, a rewards application that makes it easier for everyone to earn and own bitcoin.

But he admitted that it’s still far off. “As far as assets under management, we’re not anywhere close to [it].”

Added Dean Nolan of Fifth Third Bank: “All of [this] is reminiscent of a product that is early in its lifecycle. I agree the future will take us there, but I don’t think the future is today.”

UNC-Chapel Hill’s Eric Ghysels. CREDIT: Steve Rubin/Kenan Institute.

AI and robo-advisors

Another hot topic was the impact of artificial intelligence (AI) on the financial sector, and the advent of modern robo-advisers.

In recent years, it’s emerged as a growing digital platform to provide automated, algorithm-driven financial planning services with little to no human supervision.

Could this take over the wealth management sector?

Probably not, experts say.

“Our experience with robo-advising, it’s a fantastic tool. But what we’ve found is that as clients climb that wealth curve and have more assets to invest, they actually do want to talk to a person,” Maguire said.

“My guess is, it has greater applicability when you have few investable assets. It’s still useful as your wealth journey progresses, but I don’t think of it as a displacement mechanism.”

The Triangle, a Fintech hub?

As for the Triangle, some opined that the region had all the makings of a future fintech hub.

“Everything about this area points to growth and a great place to start any type of entrepreneurial venture, not excluding Fintech,” said Stephen Markwell of JPMorgan Chase.

“There are a few examples of it now. There are some great unicorn-range companies in the Charlotte area, and a few more in Wilmington. I would expect to see some here with all the things that the university has stood up to facilitate.”

But there’s still a lot of work to be done, as Adelman pointed out.

A few years back at aged 21, the UNC-Chapel Hill grad started up the native commerce gateway, Cosmic. It was eventually acquired by PopSugar, Inc. and later, Ebates in 2017.

But as he recalled, those early days were tough, especially when it came to fundraising and accessing angel investors.

“[The angel investor network] was non existent six or seven years ago,” he said. “There are so many great things about starting a company in NC, but we’ve got to be way better about investing in all this talent. There’s plenty of capital in the market right now, and it’s all going to go back to Silicon Valley or China, if we don’t identify that.”