A new report says artificial intelligence and IoT are going to transform fintech before blockchain, which still has some growing up to do.

The rise of AI and the Internet of Things (IoT) is happening rapidly—and according to a Forrester Research report released earlier this month, these are the two technologies that will provide fintech comapnies with the most opportunity to grow and expand their levels of customer engagement by 2021.

“Fintechs are essentially disintermediating banks, and so much of what people do is about how they manage their money,” says Brian Hopkins, VP, Principal Analyst for Forrester and author of the study. “[Fintechs] are turning data into actions, but a big problem with using data for insight is that you have to make that data ready for insight.”

This is a part of big data analytics that is often overlooked, and is also the area where innovation is key; preparing data for insights has been a slow but steady climb for years, according to Hopkins, who pointed out that IBM’s Watson took four years to build—four years to build the capability for an AI to recognize 150 “features,” or data points which correlate to an actionable outcome, of the English language.

Furthermore, the paper reports that IoT analytics also have the potential to help fintechs disrupt the world of core banking, because of advances in IoT software. In other words, over this five-year period, fintechs and other businesses should focus on developing better IoT devices to gain a competitive advantage.

AI and the IoT have been hot topics in fintech and other industries for some time now, but their potential for banking has been overshadowed in recent times by the potential of the almighty blockchain—something that the report does not believe will make a significant impact for the banking world in the next five years.

“Blockchain is making big waves in fintech, and the potential is there,” says Hopkins, adding that firstly, for a technology to make it onto his list it had to have a “cross-industry impact,” before then comparing blockchain to the rise of the iPhone, which came along at just the right time to give customers what they wanted. “It has a lot of maturing to do—I would say that we’re in the Palm Pilot phase of blockchain.”

To learn more about the IoT, join us at Bank Innovation Israel this November 1-3 in Tel Aviv. Learn more and register here.