If you looked at the FinTech sector a few years ago, it was actually quite clear what it was all about: new apps, new payment methods, everything faster, more modern, sleeker. It was very much about what you could see and use directly.
Today, that has shifted considerably. The most exciting developments often happen behind the scenes – in other words, where ordinary users don’t even look. Digital infrastructure has now become something of a foundation. Without it, nothing works anymore.
The focus is no longer on the product
In the past, the thinking was often: we’ll build a product that’s better than the bank’s. Simpler, faster, cheaper. And that did work, at least for a while.
Nowadays, it’s less about building a product and more about creating systems that work together. APIs, cloud solutions, modular platforms. These are the things people talk about today, even if they aren’t particularly tangible.
You could say that true innovation has become invisible.
One example of this is companies like Ju Group. They don’t just focus on individual applications, but rather on an entire system. In other words, solutions that connect different areas – identity, assets, administration. The goal isn’t quick success with an app, but something that lasts longer and can be adapted.
Why this plays such a significant role globally
Things get really interesting when you look at what’s happening outside the traditional markets. In many countries, people still have no real access to banks or only very limited access.
And that’s exactly where digital infrastructure comes into play. With a smartphone and internet access, you can suddenly do things that used to require a visit to a bank branch. Opening an account, sending money, getting loans. Often these things are quicker and cheaper to do digitally.
Sometimes this even gives rise to completely new systems that no longer need the old structures at all. This ‘leapfrogging’ – that is, skipping stages of development – is quite evident in some regions.
This also shows that innovation doesn’t just happen in the major financial centres.
Technologies are intertwining
What is further driving this development is the combination of different technologies. Artificial intelligence, blockchain, digital identities. Taken individually, these are all familiar concepts. It only becomes interesting when they are used together.
For example: an AI assesses creditworthiness in seconds, whilst a blockchain securely records the transaction. At the same time, an identity system ensures that it is clear who is actually behind it. That may sound technical at first, but in everyday life, it’s often no longer even visible.
A good example of this is ‘embedded finance’. In other words, financial services that are simply built into something. You buy something online, pay for it, and might be offered financing straight away, all in a single process.
It’s becoming more complex and also more vulnerable
The more everything is interconnected, the more things can naturally go wrong. That’s something that’s sometimes underestimated.
If one system fails, it can quickly bring other areas down with it. That’s why stability has become such a major concern. Many providers are investing heavily in their architecture – redundant systems, monitoring, things like that.
Security is also playing an increasingly important role. More interfaces automatically mean more potential vulnerabilities. You can’t avoid this entirely, but you can secure it.
Encryption, access controls, regular checks: these are simply part of the package now. At the same time, everything must remain fast and user-friendly. That’s often quite a balancing act.
Regulation is more complicated than you might think
One area that often gets a bit overlooked is regulation. Especially when operating internationally, things can quickly become confusing.
In the US, the whole system is quite fragmented, but it’s also interesting to look at Asia, particularly Singapore. There, many things seem to be much more clearly structured.
The key difference: there is essentially a single central supervisory authority that covers almost everything, the Monetary Authority of Singapore (MAS). It acts simultaneously as the central bank, financial regulator, and promoter of innovation. This makes things much simpler, as companies do not have to deal with five different bodies but have a single point of contact.
What makes Singapore particularly interesting is its approach to new technologies. The MAS does not merely seek to regulate, but actively supports innovation. A well-known example is the so-called ‘regulatory sandboxes’. Companies can test new financial products there without having to fully comply with all regulatory requirements straight away, naturally under controlled conditions.
At the same time, however, the rules are by no means lax. Issues such as anti-money laundering, risk management and data protection are taken very seriously. The difference lies more in how regulation is carried out: often clearly, pragmatically and with close dialogue between the regulator and companies.
In Europe, much also appears structured at first glance, for instance through institutions such as the European Commission and regulations such as the General Data Protection Regulation. Nevertheless, there is more coordination between individual countries here, which sometimes slows down processes.
Featured based on image by Who is Danny via Magnific
