Digital is taking over everything and digital disruption is affecting the fintech industry on a very positive note. Cryptocurrencies are everywhere and talk of the world. The world is moving towards cashless, technology is changing the way we handle money and the way we shop, banking has become more sophisticated with digital transformation and the world of banking is shrinking to the size of a palm. all these happening because of the fintech revolution, let’s understand what is fintech and what are the benefits it can bring you.
Over the past five years, fintech has emerged itself as an essential part of the global financial services ecosystem. Fintech startups have raised, and continue to raise, billions of dollars annually. At the same time, traditional financial institutions are getting in on the act and using fintech to remain competitive in a rapidly evolving financial services landscape. Let’s dive into the topic and swim through the fintech ocean.
Fintech – Definition
As a definition, Fintech is usually applied to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising and even asset management.
Investopedia describes Fintech as a portmanteau of financial technology that describes an emerging financial services sector in the 21st century. Originally, the term applied to technology applied to the back-end of established consumer and trade financial institutions. Since the end of the first decade of the 21st century, the term has expanded to include any technological innovation in the financial sector, including innovations in financial literacy and education, retail banking, investment and even crypto-currencies like bitcoin.
As published in cnbc.com, According to EY’s Fintech Adoption Index, a third of consumers worldwide are using two or more fintech services, with 84 percent of customers saying they are aware of fintech (up 22 percent from the previous year). But users are often unaware that the financial services applications they use count as “fintech” or may not know what exactly fintech and its accompanying jargon mean.
How the world experiencing fintech
The rise of fintech has relentlessly changed the way companies do business. The traditional model of doing business such as banks and investors no more in business
From finding investments to doing transactions, there has never been as ample choice to entrepreneurs as there is currently. Fintech paved the way to start your business and run effortlessly.
Crowdsourcing, for example, allows people with great ideas to get funding quickly and easily from anywhere in the world from people they have never met. Instead of months of loan processing and big-headed investor talks, entrepreneurs can pitch directly to the world using the technology. Great ideas have never been this much easier to launch and roll.
Fintech changed the way we handle payments, transferring money from one end of the world to the other end is just a matter of touch, mobile payments and mobile banking changed the way you paid your utility and shopping bills. Technology has adopted everything, and financial services are the most loved adoption of technology.
Marketdataforcast.com predicts that, The global financial technology market is expected to grow gradually and reach a market value of approximately $324 billion by 2026, growing at a compound annual rate of about 23.41% over the forecast period 2021-2026.
- Automation will become a way of life for consumers. So many of our financial decisions or actions are one-offs: paying a bill, making an investment, transferring funds. Over the next few years, we’re going to see a big trend moving towards automated financial decisions and actions. From bill autopay’s to automated savings to better overdraft protection tools, we’re going to see a lot of apps dedicated to helping people live a more automated financial life.
- Bank acquisitions. The major banks have woken up to fintech and are actively thinking about how they can compete and continue to serve their customers. currently we are witnessing a uptrend in some major (and minor) acquisitions of fintech companies by the big banks.
- New and better identity validation / KYC products, lots of startups focusing on fraud and risk automation, and strong continued growth in B2B lending.
We are just experiencing the beginning, there is more to come
The rise of fintech has opened a world of possibilities. Businesses can offer more services than ever and for a fraction of the price of what it would have cost before.
Entrepreneurs need to be keeping up to date with fintech developments as a vital part of their daily life. Being aware of the latest opportunities and developments within the field will only improve your business and help you stay at the forefront of your market.
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