“At the end of the day, customer-centric fin-tech solutions are going to win.”- Giles Sutherland.
Fintech innovation has changed the way we look at banking and financial services. From credit cards to contactless payment, it has been tremendously transformed in the past few years.
It is one of the fastest-growing areas of global business and has brought significant change to our economy. From cryptocurrency exchanges to crowdfunding platforms, there is no escape from Fintech.
Fintech startups have challenged the traditional methods through innovation in the banking sector. But how? Obviously, by making our life easy! But there are more factors to it. Before we dive into the topic, you need to understand the basics of fintech. So, here we go!
What is Fintech?
Fintech refers to the combination of “Financial Technology.” It is used for new technology that automates the delivery and use of financial services. To its core, fintech helps companies, business owners, and consumers better manage their financial operations with specialized software and algorithms.
Fintech was initially applied to the technology employed at the back-end systems of the establishments of financial institutions. However, now it includes consumer-oriented services in different services and industries such as education, fundraising, investment, and retail banking.
According to Mirna Sleiman, the Founder, and CEO of Fintech Galaxy, “Consumers no longer like traditional ways of banking anymore. Every bank is not feeling the heat of technology and disruption.”
Fintech Startups and New Relationships with Money
“We are going cashless.” Fintech startups have just changed the way we think about money in real-time, forcing consumers to adopt the habit of digital transactions. It requires consumers to pay digitally for goods and services instead of using cash. Before digitalization, it was just used in bank services, but now the fintech startups have developed apps, making it easier and more convenient.
Payment transactions through smartphones and smartwatches are another and the finest example of fintech advancement, consumers are adopting today. While startups like Zelle, Venmo, and TransferWise are the game changers in the fintech industry, Razorpay, MoneyTap, Fintech Galaxy, Paytm, and Shiksha Finance are some of the most prominent among them.
Fintech Making Life Easier
Needless to say, fintech is making our lives easier. Fintech companies are leading the industry by creating a wide range of new financial products and services, to make money management easier and more effective.
Here are a few factors that prove the importance of fintech in our lives.
Accessibility to Funds
Fintech has made accessibility to funds easy and transparent. It has changed the way people borrow money from banks via loans and mortgages. The new non-traditional methods for getting funds are crowdfunding and peer-to-peer lending.
Fintech trends have made a drastic and positive change in the financial market. The use of AI ( Artificial Intelligence) and machine learning is allowing automated trading in the stock market. This new access gives individuals the opportunity to build connections and access trading facilities that were once only available to corporate investors.
Data processing and analysis tools have automated asset management. The cloud-based robotic advisory platform uses algorithms to advise consumers on investment and wealth management.
For those who don’t know, Regtech is the management of regulatory processes within the financial industry through technology. With the help of regtech tools, you can monitor transactions and identify fraud activities. Identifying potential threats will help you minimize risks, and data breaches can be avoided.
Not only for millennials and Gen X, but some fintech startups are also working towards helping grandparents and great-grandparents who are financially vulnerable. Startups like SilverBills and Eversafe aim to make it easier for senior citizens to manage their monthly bills. The app can learn their habits and send alerts when spotting something unusual.
The Pros and Cons of Fintech
Do you think fintech has cons? Yes, it does! Every technology has its pros and cons, and so does fintech. Let’s have a look at them:
The Pros of Fintech
It makes money transactions easy.
It helps to save time.
It provides several services
It helps with money management.
It offers less commission than traditional banking.
The Cons of Fintech
It does not have physical branches.
There is a fear of data security and privacy.
With technology’s evolution, some people are likely to feel left behind.
It can contribute to global inequality.
It can end the traditional economy.
With the increase and advancement of fintech, we will witness drastic changes in the financial industry in the coming few years. It will be no surprise if I say that the fintech industry is changing our lives and habits by making trading, banking, and money exchange without the need for human interference. However, the financial sector has a few challenges to overcome in the regulation of data protection and security.
We at OpenGrowth, are committed to keeping you updated with the best content on the latest trendy topics from any major field. Also, both your feedback and suggestions are valuable to us. So, do share them in the comment section below.