In many ways, the world is more connected today than it has ever been. The flow of ideas and information across the globe takes only seconds thanks to the proliferation of internet-enabled devices, while people and goods can quickly and easily traverse the world thanks to free trade and open border agreements. However, despite these contemporary trends, the CFA Institute forecasts that the near future may be characterized less by an interconnected world and more by parallel worlds as fissures open up across our society and our institutions rush to adapt.
The CFA’s Future of Finance report, which I discuss in a previous blog post, describes four possible scenarios for the financial world of tomorrow: fintech disruption, “lower for longer,” purposeful capitalism, and lastly, parallel worlds, in which different strata of our society—men and women, rich and poor, rural and urban, and so on—interact with society in different ways, prompting greater personalization and ease of access to financial services.
In the parallel worlds scenario, the growth of social media suddenly allows people and groups who previously existed on the margins of society to engage more fully in political and financial worlds. As a result, social media primarily becomes a forum to express discontent with elites and institutions by the people who did not benefit from what the CFA describes as the “golden marriage” of capitalism and democracy. This popularizes anti-establishment and anti-globalist views, which in turn fuels an ascendant authoritarian nationalism around the world.
Meanwhile, as the “haves” continue to make advances in healthcare and education relative to the “have-nots,” people begin to engage with society differently based on the social group they belong to; these social stratifications exist along lines of gender, class, political inclination, and so on.
The financial world—according to the CFA—will adapt by emphasizing personalization and simplicity in their offerings. Owing to the popularity of social media and widespread internet access, consumers will come to demand a wider range of digital financial options, which will cause financial services to become less expensive, more abundant, and significantly easier to access. Therefore, opportunities to innovate will come in the form of developing infrastructure and new channels to engage with financial services rather than actually unveiling new services.