Look for Predictive Modeling to Disrupt the Finance Sector

Disruptive technology like predictive analytics is permeating every corner of business whether it’s in healthcare or retail sales. Naturally, that means the finance sector is also going to utilize the powers of predictive analytics to further its own business models.

“Predictive modeling, also called predictive analytics, has furthermore found its way into healthcare, marketing, and retail, in the latter of which it is often used to improve the customer experience by predicting what the shopper is most likely going to buy,” a Finance Feeds article noted. “Due to its broad spectrum of applications and its ability to substantially improve business results, predictive analytics is among the top three technologies industry professionals are investing in in 2020, a recent Statista survey found – a finding that corresponds with my own experience and observations.”

“Naturally, one would also like to foresee the future in the financial sector, especially when speculating in stock markets,” the article added. “Predictive models can be built for different asset classes such as stocks, currencies, or commodities.”

As such, investors can take advantage of this growth via exchange-traded funds (ETFs) that focus on financial technology or fintech.

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.

For more market trends, visit ETF Trends.