Fintech was just one of the many sectors that felt the hurt in the broad market selloff, but there are still reasons to watch the space in 2023, especially relative to the mega-tech cap’s significant losses, as recent changes at Shopify (SHOP) exemplify. For investors with a positive outlook on tech and disruptive innovation in the coming year, the ARK Fintech Innovation ETF (ARKF) could provide an appealing strategy for a possible 2023 fintech bounce.
Why might fintech be appealing despite such a difficult 2022 for tech overall? While there is still a lot of potential for growth at firms leveraging the blockchain, it’s instead the role that fintech platform companies like SHOP can play for companies small and large in 2023. Small and mid-sized firms already look to SHOP for help running their businesses, but it’s the potential for SHOP in the larger cap space that causes intrigue.
Expanding its audience may inform SHOP’s recent move to open up its infrastructure with the new Commerce Components by Shopify (CCS) platform. The new CCS platform targets larger firms that may already have certain capabilities like fraud protection but may want to pick and choose other Shopify tools like storefront searching, tax services, and one-click checkout to add to their sites.
As part of its announcement, SHOP shared that toy company Mattel (MAT) would be one of the first companies to use Commerce Components. SHOP’s play here may not only give it a big boost but also make it an example for other companies in the space and a spearhead for a broader 2023 fintech bounce.
The fintech ETF ARKF has a larger weight for SHOP than any other ETF according to VettaFi, charging 75 basis points for its exposures. The active ETF invests in winners in fintech that benefit from advances in customer platforms as well as blockchain and transaction innovations. While disruptive innovation didn’t have the easiest of years in 2022, patient investors may want to follow ARKF and how it could benefit from SHOP moving forward.
For more news, information, and analysis, visit the Disruptive Technology Channel.