The phrase “new normal” is pervasive these days, but as it pertains to the burgeoning fintech industry, new normal is a positive and that’s a boon for the ARK Fintech Innovation ETF (NYSEARCA: ARKF).
Already one of this year’s story ETFs, ARKF is benefiting from a slew of new normal trends arising from the coronavirus pandemic. Importantly, those trends are going to be a part of our lives well after the virus is vanquished.
“Eighty percent of Americans now say they can manage their finances without a physical bank branch, according to a new survey commissioned by Plaid,” reports Gene Teare for Crunchbase. “Fintech is viewed as the “new normal” by 73 percent of Americans, according to the report, and 67 percent plan to continue managing most of their finances digitally after COVID.”
ARKF invests in equity securities of companies that ARK believes are shifting financial services and economic transactions to technology infrastructure platforms, ultimately revolutionizing financial services by creating simplicity and accessibility while driving down costs.
ARKF: Good for New Normal
Social distancing may have kept customers away from brick-and-mortar banks more often than not, giving financial technology time to shine. As consumers forge on following the pandemic, the ease of use provided by fintech could be a major disruptor for banks.
“The majority of survey respondents used fintech before the crisis. But the survey showed that when COVID-19 hit, fintech adoption accelerated and Americans reported using more fintech tools, more frequently, and for more financial tasks during the pandemic—59 percent of respondents stated they use more apps to manage money now than they did before the pandemic,” according to Plaid.
ARKF member firms are companies that are powered by innovations and are working to disintermediate or bypass the current financial markets and challenge traditional institutions by offering new solutions that are better, cheaper, faster, and more novel and secure.
“We noted in our Industry Spotlight: Fintech Report (launched earlier this year) that investments in fintech companies have grown more than ninefold since 2010 and have more than doubled since 2015,” according to Crunchbase. “Leading sectors for investments in fintech are in payments, insurance, banking, and lending. So far in 2020, $26.5 billion has been invested in global fintech companies. That amounts to 14 percent of all investment dollars.”
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.