If you ever deposited your paycheque by snapping a photo on your phone and uploaded it to your bank’s mobile app, or if you split a dinner tab by e-transfering your friend and even if you paid for something with Apple Pay, You may not even realize that you’re already a part of fintech. In this guide, we’ll break down what Fintech is, how it’s used and the goals of Fintech so let’s get started!
What is Fintech?
Fintech is short for “financial technology” and refers to any application of new technology (specifically software) designed to “disrupt, enhance, or replace traditional financial services. Any size of company can be considered as fintech ones, whether they are a tech startup or mid-size or large corporation. If they deal with offering financial services or products through a tech platform, it’s fintech. A study done by PwC found that a whopping 47% of telecommunications and financial services companies have begun embedding fintech into their operating models but many are still in the development or pilot stages. This highlights the risk of them being left behind and losing their customers. Fintech enables companies to create low-cost but high-value and data-driven solutions for their customers, many of these solutions are designed to simplify payment process and operations. It’s no surprise that fintech has seen a 64% adoption rate across the globe.
What is the goal of Fintech?
The goal of Fintech is to transform how financial companies operate, work together while improving their services and products with the customer’s best interest in mind. On a business side, a fintech companies’ goal is to help clients reduce their expenses while improving the speed and efficiency of the process, systems and operations. This can help businesses with things such as online business payment solutions and more! While for consumers, fintech companies work to offer easier, more convenient and streamlined financial services. This where that “disruption” element mentioned above comes in, fintech companies are designed to grab market share from traditional financial services and the legacy banking system. In both situations, the overall goal of fintech is the same: to change and improve existing financial services and systems. By creating seamless experiences that attract and retain customers, fintech will differentiate organizations that implement fintech elements and win the market while also highlighting those that don’t and fail. The ultimate goals of fintech is to create products that are:
SecurePersonalizedConvenientLow-costEasy to use
How does Fintech affect me?
Many of Fintech’s products are already being used by consumers in their homes and daily life. The COVID-19 pandemic saw consumers become even more reliant on their digital and online habits. So making the transition with their financial institutions is an easy and expected route. As businesses shut down and closed their public operation in response to the global pandemic, more and more consumers went online to ship, communicate and even work. Banks also had to alter their standard protocols, since consumers couldn’t come in for their regular transactions they were forced to seek financial products online. Since the world has now become more digitized than ever, the demand for Fintech is greater than ever. Speaking of the banking industry specifically, many of the services that banks have been offering for years have gone digital. Fintech makes expediting processes that once took days, weeks or even months quicker. Whether you are looking to open and manage a savings account to sending an interaction money transfer or even borrowing money. Financial institutions are responding to customers’ need for better banking services by investing in Fintech services to make everyday banking more accessible online. Some more common options can include online banking and apps to help customers track and budget their money wherever and whenever they want. On the more advanced side, advanced technology and various data collection methods have that capability to allow digital lenders to offer customers new ways to borrow money. This speeds up the application and approval process while integrating more ease into the process. This concept of digital lenders even extends into applying for student loans, car loans and personal lines of credit.
In conclusion
Fintech is here and not going anywhere. With the rise and demand of more digital services, Fintech is here to help make things easier on financial institutions and consumers. It streamlines processes, systems and operations that benefits both the business and consumer.
