What is Fintech?
The term ‘Fintech’ is the combination of the words ‘finance’ and ‘technology’. Fintech aims to optimise financial services by automating and digitalising processes. These changes affect customers, businesses, and financial institutions
How is Fintech changing Banking?
Banking has been innovative for many years. However, the rate of development has increased over the last decade.
Fintech is now a fast-moving, inventive market. For example, it has digitalised many banking services, allowing customers to make transactions, increase overdraft limits, and more through mobile banking.
Moving online has also initiated more sustainable, paper-free banking that lowers emissions.
Examples of Fintech in Banking
Neobanks (also known as “disrupter banks” or “digital banks”) are banks that only operate online. Rather than having a network of physical branches, neobanks provide apps and other online platforms for their customers’ banking needs. Some neobanks launch as EMIs to enter the market and then upgrade to offer a full range of banking services.
Challenger banks are small and medium-sized banks that want to challenge larger, more established banks. Challenger banks compete for business by adopting innovative technologies at a faster pace than traditional institutions can manage. These new technologies allow challenger banks to offer a wider range of products, services, and prices than traditional banks.
Why invest in Fintech and Banking?
Fintech is one of the fastest-growing emerging industries. And it has shaken up the once-stagnant financial world. Now, fintech innovation is making many financial processes more straightforward and accessible. Mobile banking, mobile payments, crowdfunding, cryptocurrency, and blockchain are all examples of ground breaking fintech. Many large companies built their success using these new technologies. And they’re also changing lots of well-known sectors like investment, wealth management, and insurance.
Cash is Quickly Turning Digital: If you think about how your purchasing habits have altered over the last few years, you’ll notice that you use cash less often. Whether you’re paying for a coffee or banking, cash probably isn’t your first choice. Fintech companies flourish on this change because it means more transactions on their platforms. These digital payments are the prime product of the industry, forming 25% of its ecosystem. And studies suggest that 90% of smartphone users will make mobile-based payments. With all this in mind, digital payment apps have a lot of space for growth.
Importance of Financial Data Security: Financial organisations and banks face massive challenges when safeguarding customer data. They are under pressure to enforce safety measures that secure sensitive information. So, they employ fintech companies to prevent cyber-attacks that cause significant financial losses.
Today, Your Mobile is your Wallet: Fintech companies are leading the transformation toward a cashless economy. They have developed technologies that make payments more convenient and offer an improved experience. That’s what fintech is all about – creating better ways to do things. In addition, these flexible and diverse fintech products help more people access financial systems.