Like the rest of the tech industry in 2022, fintech took a hit as its momentum during the height of the pandemic started to dissipate while inflation started to rise.
Fintech was one of the darlings during the onset of the pandemic as lockdown restrictions forced consumers to pay for goods and services via digital means. This spurred investor interest in the space, which grew exponentially over the last couple of years.
Now, as the world moves away from such safety measures, valuations in tech companies are starting to come back down to reality. Still, fintech should see transformational growth, given that it’s still fairly new as an industry disruptor, meaning that it should provide investors with future growth prospects.
“The future of fintech is expected to continue its rapid growth as technology continues to shape and revolutionize the financial industry,” Coin Telegraph noted. “Financial services will become more accessible, secure and innovative thanks to innovations like blockchain, AI and open banking.”
“In addition, there will be a trend toward digitization as more and more customers choose mobile and online banking options,” the article added further. “It can be anticipated that traditional financial institutions and fintech firms will increasingly integrate, which will result in the development of new financial services and products.”
When looking for opportunities, investors can opt to purchase individual stocks that could capture this growth. However, there’s a simpler solution: the ARK Fintech Innovation ETF (ARKF B-).
With its active management, the fund seeks long-term growth, investing in domestic and foreign equity securities of companies that are engaged in the fund’s investment theme of fintech innovation. A company is deemed to be engaged in the theme of fintech innovation if (i) it derives a significant portion of its revenue or market value from the theme of fintech innovation, or (ii) it has stated its primary business to be in products and services focused on the theme of fintech innovation.
As per the product website, the adviser defines “fintech innovation” as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works, which ARK believes includes but is not limited to the following business platforms:
- Transaction innovations.
- Blockchain technology.
- Risk transformation.
- Frictionless funding platforms.
- Customer-facing platforms.
- New intermediaries.
For more news, information, and analysis, visit our Disruptive Technology Channel.