You all might have heard about the buzzword fintech? But I am sure many of you must be wondering as to what exactly is this term about? Financial technology also known as fintech is the boom of the financial industry. The literal meaning of the term is the use and application of technology in the financial industry. It has revolutionized the way the financial world was conducting its operations before. Fintech involves the use of technology which is disrupting traditional financial service.
Fintech is challenging the traditional ways of doing business. Goldman Sachs estimates the worldwide fintech industry to be worth $4.7 trillion. It has made many traditional services a lot easier and better.
The fintech start-ups emerged after the financial crisis of 2008, due to which many customers lost their trust in the banking industry conglomerates. There are more than 12,000 fintech startups worldwide.
Cloud-computing and easily available software also made it easy for start-ups to flourish and attract customers on the basis of easy and reliable services.
The advent of fintech brought about a shift towards a customer-centric approach which means the focus is on customer and providing them with best quality services. This change resulted in confusion in the financial industry. Banking giants were worried by this change, some welcomed it while others could not decide if the change should be adopted or not.
Another factor which is worrisome for the banks initially, handling the tough competition with these fintech start-ups. This is because giant banks are unable to compete due to internal structures and regulatory environment.
The big banks were unable to implement the changes brought forward by fintech immediately firstly because of the cost involved. The new start-ups entering the market are gaining many benefits in terms of costs and services. Since their target market is millennials who find such services easy to use the big banks are aware of the risks. With smartphones and the internet, the fintech services are easily accessible regardless of location or time zone.
With developments in fintech taking place at a rapid pace this technology is developing but it will still take some time to match the service levels of big banking giants. Nevertheless, the benefits of this revolution cannot be ignored. It has made it easier to provide access to banking services to all kinds of customers, regardless of location, region or boundaries. Also, its innovations such as blockchain and digital currencies are becoming a source of revenue streams at a global level, creating secure transaction experience for customers, promoting innovation and providing benefits to customers in the best possible manner.
Not only this, but it is also causing collaborations which were never possible before. Many banks are partnering with fintech start-ups in order to benefit from the new technologies and shaping technology solutions according to their own requirements. All in all, we can hope that fintech will bring positive changes in the financial industry and provide customers with the ultimate benefits.
You must be logged in to post a comment.