The rapidly evolving fintech landscape is witnessing a remarkable transformation, driven by advancements in leveraging both artificial intelligence (AI) and cloud computing technologies. With customers top of mind, we are seeing fintechs increasingly harness the power of choice and flexibility that comes with hybrid multicloud and lean into the power of data analytics to deliver enhanced experiences.

By prioritizing resiliency, performance, security and compliance, fintechs are helping to revolutionize the way financial services are delivered. Whether they are providing personalized financial solutions catered to the specific needs of individual customers or transforming the hedge fund space with analytical tools to measure performance and risk data on a more real-time basis for clients, fintechs are leveraging the innovative technologies of AI and cloud.

Agility and speed help drive innovation

With their agility and speed, we believe fintechs are well equipped to discover new trends in the financial sector and offer customers greater choice and convenience. MySocialPulse designed an artificial social intelligence platform that can help clients monitor emerging financial trends taking place on social media platforms like Reddit and X in real-time, including discovering market insights based on positive or negative social media sentiments and eight emotions. These features can be key to keeping individuals up to date on the latest financial opportunities and risks, helping them uncover real insights that can be buried in the plethora of hashtags, comments and trading trends featured on social platforms. Founded in the UK in 2020, MySocialPulse has continued to scale its business by leveraging both cloud and AI technologies from IBM.

The opportunities fintechs bring into the financial services ecosystem provide a unique potential to grow beyond the traditional role of financial services, especially if fintechs want to take the lead on environmental and social issues—from climate change to diversity, equity and inclusion.

Yayzy, a UK-based fintech, is on a mission to redefine sustainability innovation in banking. The fintech developed its Carbon Footprint Calculation technology for banks and other fintechs to integrate within their mobile apps, enabling carbon-footprint tracking for customers based on their spending, alongside sustainable alternative suggestions for footprint reduction and carbon offsetting. By leveraging IBM Cloud, Yayzy is accelerating its digital transformation with high levels of security and scaling globally in line with demand while leveraging other advanced software capabilities, from artificial intelligence (AI) and machine learning (ML) to cybersecurity solutions.

Scaling with a security-first mindset while navigating compliance

We believe fintechs will remain a force of growth for innovation and digital transformation as they move from the fringes of the financial services industry to its very core. As part of their hybrid cloud and AI transformations, fintechs should consider how to manage the influx of data across cloud and on-prem environments. Furthermore, they should consider how they are keeping their data secure and compliant, especially given the evolving security-threat landscape and regulatory concerns. It is important to remember that third- and fourth-party dependencies can open the door to additional levels of risk that must be managed. 

IBM Cloud for Financial Services

To help both fintechs and financial institutions overcome this, industry cloud platforms can help mitigate risk and address compliance requirements while driving innovation. With IBM Cloud for Financial Services, a first-of-its-kind cloud with built-in controls informed by the industry, we are working to help clients on their missions to mitigate this risk, positioning financial services and other regulated industries to host applications and workloads in the cloud in a secured environment. We are also working with more than 130 technology partners and fintechs to validate their security and compliance posture.

As the financial services industry continues to evolve, fintechs must continue to maintain their edge as they become recognized as a critical part of the global financial system, while keeping up with evolving regulatory requirements. With a strong ecosystem of partners, fintechs can better drive innovation to meet the demands of today’s customers while addressing the needs of the industry.