Is the fintech boom coming to an end?

Probably not. Though funding for financial technology developers declined 26 percent from the first quarter to the second quarter of 2016, a recent report from PricewaterhouseCoopers’ DeNovo platform finds plenty of room for growth in the industry.

“Funding is down year over year, too, but there are pockets of growth and an incredible amount of innovation going on,” says Aaron Schwartz, DeNovo head of research. “When we bifurcate fintech into subsectors or trends, we see some areas that are slowing down in the later stages in the investment spectrum, and other areas that are in the early stages that show very healthy growth.”

The largest opportunity for fintech developers is linking the financial services industry with the 2 billion global adults currently absent from the formal financial system.

According to PricewaterhouseCoopers, these underserved adults represent $360 billion in unmet banking and deposit demand and $20 billion in uncaptured insurance premiums in the U.S. alone. Services and tools for underserved consumers became the most funded fintech trend in the second quarter.

A significant portion of Americans underserved by the financial industry are young adults, says Schwartz.

Faced with an industry poorly positioned to serve them and imbued with a deep distrust of financial firms, millennials are looking elsewhere for financial advice. The report says that millennials are receiving investment information from blogs, online message boards and chats instead of from advisors. Furthermore, PricewaterhouseCoopers says that “crowdsourced” recommendations from sites like Seeking Alpha tend to outperform those from professional analysts and traditional investment news.

Robo-advisors might not be the wave of the future, says Schwartz.

“Robos have attracted a lot of money, but now the incumbents are stepping into the market,” Schwartz says. “We’re starting to see more activities around different types of enabling technology.”

Increased fee and management transparency is driving consumers away from the traditional wealth management industry and toward more fintech solutions, according to PricewaterhouseCoopers.

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