Henri Arslanian - The Future of Finance: The Impact of FinTech, AI, and Crypto on Financial Services

Cover illustration: Science Photo Library / Alamy Stock Photo

Cover design by Tjaa Krivec

This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG

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We are going through perhaps the most exciting period in the modern history of financial services. The rapid acceleration of technology is enabling a fundamental reinvention of the structure of the financial institution, while at the same time inviting the entrance of new competitors with the potential to upend the traditional order of the industry. As with any revolution, there will be winners and there will be losers; some will be able to adapt and thrive in the face of these changes, while others will struggle to reinvent themselves in the ways necessary to remain relevant. It is impossible for us to know for certain who will emerge victorious from this period of tumultuous change, but we can examine the forces that have shaped the transformation so far, and consider what the future might hold. This book is written for those who want to understand the transformation that technology is driving in financial services and to consider the impact these forces might have on the future of the industry and on themselves.

We believe that three key areas of innovation are poised to have an outsized impact on the shape of the financial services ecosystem. These are the fintech revolution, the advent of crypto-assets, and the rise of artificial intelligence (AI). In the chapters that follow, we will explore each of these subjects independently, helping the reader to understand the context, background, and fundamentals of these trends. Grasping these basic concepts in detail is critical as it provides the foundational knowledge to explore further.

Armed with these basic concepts, we will consider the trends shaping the future of these areas of innovation. What might the future of fintech look like? What could be the implications of AI playing a larger role in financial decision-making? Will crypto-assets make their way into daily use by individuals around the world? We hope that the examination of these and many more questions will provide useful insights to a wide range of readers, from the bank CEO debating the strategic direction of her organization to a student considering where to focus studies or start her career.

Finally, while we believe that fintech, crypto-assets, and artificial intelligence could each have a significant and long-lasting impact on the structure of the financial system, it is the combined interaction of these three that stands to have the most transformative impact. While the confluence of these three areas of innovation may still be over the horizon, we devote our final chapter to the examination of several plausible scenarios for how they could intersect, in the hope of illustrating their potential combined power.

We hope you are as excited as we are to embark on this journey on the future of finance!

Writing a book is an intense journey. It devours all of your spare time, energy, and focus. We knew this going in, but we still underestimated it (as every author does!). However, we did it with great passion and pleasure knowing that many may benefit, and that is very rewarding. We hope that you will enjoy reading this book as much as we enjoyed writing it.

Thanking everyone who inspired us to write this book would be impossible, but we would like to take the time to thank some individuals who really made a difference and helped us bring this book to fruition.

A big thank-you to Jesse McWaters for his valuable support throughout the book. Without his priceless insights and feedback, this book would have never been the same. To Alessandro Di Lullo, who helped us enormously in writing the fintech section. His passion and dedication to making this book happen was exemplary. To Antony Lewis, for his priceless help in reviewing the crypto and blockchain sections. To Kevin Pereira, for his review and comments on the artificial intelligence chapters. And to Nikita Mathur and Nayantara Bhat, for their amazing support when it came to aspects of research and editing.

To the entire team at our publisher Palgrave Macmillan, including Tula Weis and Jacqueline Young, for their incredible support during this journeythis book would have never been possible without their continuous support and backing.

To Michael Wykoff, for his patience and meticulous proofreading and editing work. To Belinda Esterhammer and her team, for the awesome work on the graphics. And to Lisa Rivero, for the help on the indexing.

And the most important thank-you to you, dear reader, for your passion and interest in the fields of fintech, crypto, and artificial intelligence. Welcome to the future of finance!

This book would have never seen the light of day without the support of my amazing family. To my dad, from whom I learned the values of hard work and integrity. To my mom, who taught me the importance of intellectual curiosity and giving back. To my parents-in-law, for their incredible understanding and support.

But most important, to my wife Lara Setrakian (and my baby daughter Vera-Maria Arslanian!), for their patience and understanding for the entire weekends and holidays during which I was physically with them, but mentally and practically in front of the computer working on this book.