The competing centralised and decentralised visions for the future of finance and the implications of each one
fintechview sat down with Dr Alex Zarifis from the University of Southampton to discuss his research on Fintech and the new emerging ecosystems. Alex has researched new business models and services in Fintech for over ten year.
Why is it important to look at Fintech and how it is disrupting finance?
Financial technologies, Fintech, are revolutionising and reorganizing the whole financial sector including insurance. This digital transformation affects society and our everyday life in many ways, as financial services cut across many other services we use. Many relationships, such as that between a customer and a retailer, are changing and whole business models are being re-drawn. Fintech not only offers new financial services, but reduces barriers to entry, allowing for innovation in business models. The far-reaching role of Fintech and the degree of disruption from this digital transformation means everything has been ‘thrown up in the air’ and nobody knows exactly where everything will fall. Because of this, it is necessary to understand the various forms of Fintech, what their role is now, and their potential role in the future.
What are the competing visions for the future of finance mentioned in the book?
While Fintech involves many different technologies and business models there are two broader visions competing for the future of finance: One is even more centralised than what we have today, while the other is far more decentralised. The implications of the vision that prevails will be felt by all of us in our personal and professional lives.
There are some proven Fintech technologies, services and business models but there is still a-lot of uncertainty. Trust remains a challenge for Fintech, particularly when generative AI is used. Trust must be built by leaders even if this means sacrificing some of generative AI’s capabilities.
What advise would you give financial institution going through this process of using more AI?
There are six financial business models that are optimised for AI: (1) existing financial organization focusing on one part of the value chain and disaggregating, (2) existing financial organization absorbing AI into existing model, (3) existing financial organization expanding beyond current model to fully utilize the opportunities of AI and access new data, (4) startup disruptor narrowly focused on one area, built from the start to be highly automated, (5) disruptor focused on tech adding a new service like insurance, and (6) disruptor that is not necessarily tech focused with an extensive user or fanbase, (Zarifis and Cheng 2025).
Figure 1. Six financial business models with AI at their centre
The context of each country influences how much the pull for Fintech is from the consumers and how it is regulated. Even after the transitional period of disruption it is unlikely that we will be left with a ‘one size fits all’ approach by all countries.
What are some of the main drivers behind this process of transforming business models?
In addition to the typical considerations of balancing the risk and reward of new Fintech solutions, one of the undercurrents in Fintech is that of a longing for financial independence. This applies to individuals as many would expect, but this also applies to countries, and supranational organizations such as the EU. This balance between smooth collaboration and financial independence comes at a time when extreme globalisation is no longer seen as the panacea.
This research identifies three themes in Fintech: (a) Fintech utilising blockchain, Decentralised Finance, cryptocurrencies and NFTs, (b) Fintech utilising AI and the metaverse, and (c) Fintech management, consumer behaviour, regulation and cybersecurity. The people and organizations that have an understanding of these three areas will be able to get the most benefit out of Fintech and the technologies that power it such as AI and blockchain.
Reference:
Zarifis A. & Cheng X. (eds.) (2025) ‘Fintech and the Emerging Ecosystems – Exploring Centralised and Decentralised Financial Technologies’, Springer: Cham. https://doi.org/10.1007/978-3-031-83402-8
Who is Who
Dr Alex Zarifis research is on the practical applications of technology in business. He has
worked at several universities including the University of Cambridge, University of Manchester
and the University of Mannheim. He is currently a research affiliate of the Cambridge Center for
Alternative Finance (CCAF). Dr Alex has worked on large EU and UK funded research projects
at the Karlsruhe Institute of Technology (KIT) and Loughborough University. He obtained his
PhD from the University of Manchester. His research interests include Fintech business models,
Insurtech business models, trust in Fintech and Insurtech, DeFi and Central Bank Digital
Currencies (CBDC). LinkedIn | Publications