With the new credit card, Apple gives us a glimpse of the future of finance

Peter Misek is a partner at Framework Venture Partners LP

The launch of the Apple Card last week was another step in the path of financial technology launched by Apple with the launch of its portfolio in 2012. The path has been slow and arduous. As in most cases, the grandiose vision and execution took place according to the calendar of the society and not according to a predefined calendar. Apple sometimes leads, sometimes follows, but often invents a brand new category.

Last Monday, at its event, Apple unveiled a credit card free of charge and refund available in the United States in partnership with Goldman Sachs, accompanied by a titanium card brand Apple. CEO, Tim Cook, has called the move "the most important change in the credit card experience in 50 years".

The integrated Apple card and enabled on the iPhone is a game changer. Why? Apple will retain all the data rights of its ecosystem (although used and processed in devices rather than on Apple servers). This means that Apple and its partners can offer financial products directly to the iPhone. Apple Card will have immediate and deep financial connectivity and will be able to view daily purchases in real time, while having a real-time loyalty card. So, where are you going?

At Framework Venture Partners, we believe that the future of finance will be shaped by what we have called Fintech 2.0. In simple terms, our thesis is that stand-alone financial products and services will largely disappear and be integrated into the flow of applications used daily by users. Value will come not only from this integration, but from the way in which artificial intelligence will manage and deliver purchases, savings and loans in an optimal and intuitive way.

Combining real attributes and digital footprints into a seamless product will change the face of the bank and, ultimately, the business and consumer experience. Imagine for a moment that the Apple Card is used for all the daily transactions of a person. After a relatively short period of time, for example between 12 and 24 months, Apple will be able to say with a high percentage of accuracy what the income, financial situation and personal circumstances of a person looks like. at the personal level.

This detailed visibility means that Apple is likely to predict when you will be married, if you have children, or if you want to make a large purchase. With all this data, Apple could then offer this person money movements, savings, investments and even mortgages in real time, with virtually no paperwork. More importantly, Apple could offer these products pre-approved amounts and rates, tailored to that person's projected credit risk.

While this sounds scary for some, Generation Y members who are struggling to gain personal financial knowledge may be the solution they were looking for. According to a study by PwC in the United States, only 24% of Generation Y seniors today have demonstrated basic financial literacy. The need for help has become a chronic social problem.

Enter Apple: Get real time advice on how to save, spend and find solutions for that, it's the future. We believe that after 10 years, Apple Card will migrate to Apple Finance. This change will tell you where to buy your next pair of shoes at the best price within your budget. Apple can recover your excess savings and provide you with products optimized for your personal situation. In the end, putting money into Apple's supply chain could replace Wall Street savings accounts, investment funds, and so on.

While it's hard to predict when, it's not hard to guess if Apple will not stop with Apple Card. The future of fintech lies clearly in the smartphone and software, not in a branch and mainframes.