March Madness: 2nd Annual Financial Technology Trends Tournament

In honor of the NCAA men’s and women’s basketball tournament starting this week, Dan creates a bracket of the biggest financial technology trends.

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Blockchain? Mifid II? Artificial intelligence/machine learning? Who will reign supreme?

The NCAA men’s and women’s basketball tournament starts this week, which means I’m required by law to make some type of reference to it in my column. Last year I made a bracket of eight of the biggest current financial technology trends in the industry. A lot has changed in the past 12 months, so it seems like now is the perfect time to revisit the idea.

So, back for a second straight year, the 2017 Financial Technology Trends (FTT) tournament bracket.

Quarterfinals

No. 1 Artificial Intelligence/Machine Learning vs. No. 8 Virtual Reality

The rise of coverage around AI/ML over the past 12 months is similar to what blockchain experienced last year. The only difference is this technology has actual implementations that are in place at financial firms across the space. That number will only continue to rise, as seemingly every firm has shown great interest in its potential.

To be honest, there might have been a bit of bias by the tournament’s selection committee including virtual reality in the mix. While it’s certainly a technology to keep your eye on, it’s still a few years out. AI/ML in a blowout.

Winner: Artificial Intelligence/Machine Learning

 

No. 4 Trump vs. No. 5 Brexit

It’s only fair we have the two biggest political stories of 2016—and possibly the decade—meet each other in the first round of the FLL. President Trump has been vocal about revamping the financial regulatory environment. The ramifications for firms' technology departments would be huge, as systems would need to be greatly altered or wound down.

Brexit brings along its own set of issues. It is unclear what will happen to London’s thriving fintech environment, particularly in the blockchain space, once the UK officially leaves the EU. While it’s an important question to ask, it’s not as pressing as the potentially drastic decisions of the sitting president.

Winner: Trump

 

No. 3 Mifid II vs. No. 6 CAT

Like a student realizing their midterm paper is due next week, the industry is slowly coming to the realization that Mifid II’s implementation date of January 2018 is sooner rather than later. The European regulation has already been delayed a year, so I don’t think there is any way regulators will want to lose face and push it back even farther, no matter how much firms kick and stomp their feet.

Meanwhile, the Consolidated Audit Trail is well on its way to being built. Again, there may be a little bit of bias including it in the tourney, especially considering the committee recently wrote an in-depth feature about the selection of the plan processor. As important as the CAT is, though, Mifid II has farther-reaching implications.

Winner: Mifid II

 

No. 2 Blockchain vs. No. 7 Vendor Partnerships

Blockchain has slowed down a bit after coming hot out of the gate. I think a lack of large-scale implementations, while understandable, has caused some in the industry to cool on the technology.

And what do we have here? It’s the plunky underdog that is large and small vendors partnering to create better offerings for clients. While the concept has been around for a while, we’ve seen an uptick in partnerships in the vendor space—particularly between large, established companies and small fintech firms—over the past 16 months. What at first glance seemed like a mismatch actually is a hard fought battle, and win for the No. 7 seed.  

Winner: Vendor Partnerships

 

Semifinals

No. 1 Artificial Intelligence/Machine Learning vs. No. 4 Trump

Donald Trump versus robots. The story writes itself. And while Trump has dominated the news cycle for a while, AI/ML technology is the bigger trend in our space.

Winner: Artificial Intelligence/Machine Learning

 

No. 3 Mifid II vs. No. 7 Vendor Partnerships

The clock strikes midnight and the stage coach has turned back into a pumpkin in this Cinderella story. Regulations are always a top-of-mind concern for financial firms.

Winner: Mifid II

 

Final

No. 1 Artificial Intelligence/Machine Learning vs. No. 3 Mifid II

The FLL final is a strong one that plenty could have predicted from the outset. It’s innovative technology against compliance requirements. I love new, interesting technologies as much as the next person, but regulations rule all, and this is a big one coming up fast.

Winner: Mifid II

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