Mobile value transfer devices or digital wallets are scaling quickly relative to traditional banks. As of the end of 2018, Venmo had the fourth largest customer base in the U.S., falling behind the likes of established Wall Street names like Wells Fargo, Bank of America and J.P. Morgan Chase.
Artificial intelligence or deep learning could create three times the value of the Internet across industries, Friedrich said. If deep learning were to achieve the current internet’s reach, it could add $30 trillion to global equity market capitalization in the next two decades across all industries.
Blockchain could also revolutionize remittances and trade settlements, providing users with instantaneous access to cash transactions. For example, Bitcoin experienced annual transaction volumes of $1.3 trillion and a daily transaction volume of $3.1 billion in 2018.
As a way for investors to tap into these industries, Renato Leggi, Client Portfolio Manager for ARK Invest, pointed to the recently launched ARK Fintech Innovation ETF (ARKF). The portfolio managers define “Fintech innovation” as the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works, including companies that are engaged in Transaction Innovations 29%, Blockchain Technology 12%, Risk Transformation 15%, Frictionless Funding Platforms 19%, Customer Facing Platforms 17% and New Intermediaries 8%.
“ARK’s Fintech Innovation ETF focuses on innovations hat are revolutionizing the financial industry. Regulatory hanges have shifted the economics of intermediating capital, reconfiguring the value-chain and allowing exploitation by competitors. Technology is changing the ability of financial institutions to access risk, interact with customers, and facilitate transactions,” Leggi said.
Financial advisors who are interested in learning more about the financial technology segment can watch the webcast here on demand.