Tech continues to thrive in a world fueled by innovation as Covid-19 continues to permeate into business processes. Financial technology is one of those areas that will see further strength and an industry that could scale up to $22.6 billion by 2025.
“The global AI in Fintech market was estimated at USD 6.67 billion in 2019 and is expected to reach USD 22.6 billion by 2025,” a press release noted. “The market is also expected to witness a CAGR of 23.37% over the forecast period (2020-2025). Artificial Intelligence improves results by applying methods derived from the aspects of human intelligence but beyond human scale. The computational arms race since the past few years has revolutionized the fintech companies. Further, data and the near-endless amounts of information are transforming AI to unprecedented levels where smart contracts will merely continue the market trend.”
When delving deeper into the report, one of the areas of that is seeing exponential growth is process automation.
“Increasing demand for process automation among financial organizations is driving the market,” the release noted further. “Process automation is one of the major drivers of artificial intelligence in financial organizations. However, it is further evolving into cognitive process automation, where AI systems can perform even more complex automation processes.”
Fintech ETF Options
ETFs to look at in the growing fintech space include the Global X FinTech ETF (NasdaqGM: FINX) and the ARK Fintech Innovation ETF (NYSEArca: ARKF). 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.
FINX seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Global Fintech Thematic Index. The underlying index is designed to provide exposure to exchange-listed companies in developed markets that provide financial technology products and services, including companies involved in mobile payments, peer-to-peer (P2P) and marketplace lending, financial analytics software, and alternative currencies, as defined by the index provider.
Another fund to take advantage of within financial innovation is the Goldman Sachs Motif Finance Reimagined ETF (GFIN). GFIN seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the Motif Finance Reimagined Index.
The fund seeks to achieve its investment objective by investing at least 80% of its assets in securities included in its underlying index. The index is designed to deliver exposure to companies with common equity securities listed on exchanges in certain developed markets that may benefit from the on-going structural changes in the support and delivery of financial services.
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