Fintech is a buzzword that you’ve probably heard of by now. Though it is a hot topic these days, it’s definitely not something new. First introduced in the 1990’s, this technology has come a long way and continues to make a huge impact on the banking sector.
According to CB insights, there has been a significant increase in fintech investment, with around 39% of investments in the sector coming from outside the major conventional hubs such as America, China, and the United Kingdom.
Advanced trends in fintech such as AI, robotic process automation, and blockchain technology are major contributors to the maturing of the fintech sector. With more progress happening each passing year, we can expect to see fintech software development to change the whole landscape of banking in the coming years.
Impact of Fintech on traditional banking
Traditional banking has been affected by Fintech more than you might think. It’s probably one of the biggest competitions that banks have had to face till date, which has also called for techniques that will allow them to adapt and keep up with the ever-evolving realm of banking.
According to Citibank, growth of the Fintech sector is expected to cause around 30% decrease in banking sector jobs, as more people would prefer switching to Fintech services, rather than carrying on with existing conventional bank services. However, the growth of Fintech also points towards increased job opportunities in the Fintech sector.
Majority of banks have already come up with strategies such as online loans, money banks, etc., that are allowing them to compete more effectively with the rising competition. Some traditional banks have also started collaborating and investing in Fintech companies.
A few years ago, banks were thought of as institutions that were untouchable, with no major competition in their field. However, the rise of Fintech is posing a threat to their sustainability if they don’t broaden the scope of their business models and reinforce their economies of scale. As for now, experts don’t anticipate a complete fall of the conventional banking system. However, they do agree that the impact of fintech on banks is huge, and it will keep on disrupting the whole banking sector.
The FinTech Revolution
As compared to traditional banking methods, Fintech innovations are thought of as more diverse, streamlined, and convenient. Digitalization in the sector has allowed operations that are more effective and cost-effective, for both; financial providers, as well as customers.
Thanks to online banking via the internet, making transactions has become easier and swifter than ever. It has also eliminated the need to carry your cash, credit, and debit cards with you at all times. Data that is collected through digital transactions is further used to design better and more personalized services.
Other than this, several Fintech companies, such as Besure, have made transactions more convenient with the use of mobile connectivity. Now, consumers can keep a track of their finances on the go through smart gadgets and fintech apps, which also means a better customer experience.
According to ConsumerAffairs, every 8 of 10 Americans prefer making transactions digitally, rather than physically visiting a branch.
Fintech firms are constantly searching for solutions that will help make banking more robust and flexible. For example, the Remittance services today are much more accessible, quicker, and cost-effective as compared to before. Loan and insurance applications don’t require people to fill out multiple pages of documents, as Fintech has made the whole process much less hectic and time-consuming.
E-wallets are another online Fintech service that has gained a lot of popularity over the years. Digital wallets such as Apple Pay, PayPal, Android Pay, and Samsung Pay are being adopted by more and more people nowadays. These wallets can be used for a variety of purposes such as utility bill payments, ticket booking, P2P payments, and more.
According to Buy Shares UK, it is expected that the number of mobile wallet users is going to cross 1.7 billion worldwide in the next four years.
All of this is just the tip of the iceberg, like every other sector, this one too has had its fair share of challenges. However, we also can’t deny the fact that this tech is ever-evolving and only becoming better with time.
Conclusion
Fintech’s exceptional level of service to customers is something that certainly needs to be applauded. With a lot of more innovations on the horizon, people now know that FinTech is one of the biggest players in the global economy, and its use is only going to grow in the years to come.
