The ARKF ETF and the 'Technification' of the Finance Industry

Fintech’s “technification” of financial services highlights long-term opportunity with assets like the ARK Fintech Innovation ETF (NYSEARCA: ARKF).

ARKF, the dominant name among actively managed fintech exchange traded funds, defines fintech innovation “as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works.”

Obviously, one of the driving forces of the fintech revolution is app usage. Think Square’s Cash App and PayPal’s Venmo, among many others. Adoption of these technologies is soaring.

“Pre-coronavirus, we were already in an exciting new era driven by the lightning pace of the digitalization of our everyday lives,” notes deVere Group CEO Nigel Green. “The jump in usage of fintech apps from existing clients, and a sharp increase in enquiries from potential ones, underscores that people are becoming more tech-savvy than ever.”

‘ARKF’ Is Continuing to Evolve

The move away from cash, one made easier by apps such as Square and ApplePay, was well underway before COVID-19, but the pandemic accelerated that transition. In turn, ARKF’s ability to evolve with the times has been highlighted, rewarding investors along the way.

In other words, seismic change is underway in the traditional financial services industry, but it’s technology companies, including ARKF components, that are leading the real disruption.

“The financial services sector is currently undergoing, I believe, possibly the most profound transformation in history,” said deVere’s Green. “We’re seeing seismic and far-reaching shifts in client expectations. As the world moves towards an ever-more digitalized and globalized future – which is increasingly influenced by those who’ve grown-up with ‘on-the go’ tech – this phenomenon can only be expected to gain momentum.”

Adding to the long-term case for ARKF is that fintech app usage isn’t limited to sending and receiving payments. It’s expanding to envelope myriad financial services, including money management and trading.

“Whether the trend in the usage of fintech is a long-term one will be demonstrated as lockdown restrictions are eased around the world and we look ahead to a post-pandemic future,” added Green. “I will be surprised if those new users of fintech will ever go back to traditional methods of accessing, using and managing their money.”

ARKF YTD Performance

For more on disruptive technologies, visit our Disruptive Technology Channel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.