If you send money via mobile apps in your phone or you check your bank statement online – then you are already a part of the multi-billion dollar industry called Fintech. The term fintech consists of a enormous range of business models, products and technologies that are changing the financial model industry. It is associated with crowd founding platforms, cashless payments and virtual currencies. And that’s just the beginning! Since 2010, global Fintech investments increased by 20 times from ($1.9B) in 2010 to ($27.9B) in 2018.
Fintech or in other words – financial technology, covers a wide range of businesses that use software to provide financial services. Such companies are generally perceived as “start-ups”, made to disturb the already existing financial models of larger financial corporations that are less integrated with technology. However, bigger firms are aware of the need for software solutions and are turning to fintech more often.
It’s easy to observe an increase in global investments in financial technology, which gave the beginning to the multi-billion-dollar fintech industry.
Fintech has also made financial institutions better for everyday people, giving them access to services previously reserved for individuals of a particular economic stature. Technology and data make it much easier and affordable for the masses.
While technology has already changed many other aspects of our daily lives, the fintech industry trends are a bit behind the scene, although in constant development. For instance:
Robot advisors are one of the largest elements of fintech. They put users through a series of questions and then rely on algorithms to come up with an investment plan for them. Such a service can also take care of rebalancing and asset allocation automatically, giving customers less things to worry about.
Digital banks are now gaining tremendous popularity among millennials as they can now receive much more flexible services without having to even leave their home. Moreover, the Financial Brand reports that visits to bank branches will decline by 36 percent between 2017 and 2022. Furthermore, desktop banking will also suffer considerably while mobile transactions will grow by 121%.
Going cashless is very common nowadays. Simply because – there’s no need to have cash everywhere anymore. With new mobile technologies and stable, fibre internet connection – it’s just a matter of time when it becomes a regular everyday standard amongst everyone.
For a long time, specialists have predicted that blockchains will revolutionize the financial sector. This technology can be used in any industry, in which it is important to secure data exchanges. “Many large banks are currently investing in blockchain technology to be able to face their competition – start-ups and to prevent loss of income in the future”, explains Christoph Trauttenberg, (director of Michael Page Austria)
While it’s not unusual for us anymore, we still do not realize the full potential this technology has to offer. However, there’s a chance that will change in the nearest future due to technology development.
The future of fintech
Technology is becoming more and more complex and widespread every day, so we can only imagine what the next 10-15 years will bring for this industry. It is clear that the digital revolution in financial services is underway and the innovative ways to automate payments are just outside the door. Looking forward to the future, we will have transparent payments that follow the consumer’s will. The customer will not feel the payment process at all. If you like a product, you may just take a picture using your phone, the machine will recognize the it, who sells it and how much it costs. If you decide to make a transaction, the payment will be done in the background. The experts also predict that a revolution in concept approach towards things, such as loans and properties may be awaiting us soon.