If you’ve ever paid for something with your phone transferred money using an app or checked your bank statement online then you’re already part of a multi-billion dollar industry it’s called FinTech (Financial Technology) and it’s changing economies around the world
Financial Technology in real world
FinTech is short for financial technology seems simple right while the term FinTech includes a huge range of products technologies and business models that are changing the financial services industry it refers to everything from cashless payments to crowdfunding platforms to Impactguru to virtual currencies so every time you donate to someone’s on any NGO campaign that’s FinTech or if you transfer money to someone using Google Pay that’s also FinTech
Hundreds of best fintech companies are trying to disrupt the banking and finance industries by changing the way we pay and borrow money. Investors are buying it global investment in the FinTech sector has added up to nearly 100 billion dollars since 2010 in 2017 alone fintech investment surged 18% startups focusing on payment and lending Technologies received the majority of those funds it’s not just startups that are getting into fintech, some of the world’s biggest companies from Apple to Alibaba are going big on it too just think of Apple pay or Ali pay.
Adapting FinTech
One reason for all of this investment consumers are adopting FinTech fast one out of every three people across 20 major economies report using at least two fintech services in the last six months China and India are leading the way with more than half of consumers using services like money transfers Financial.
Planning borrowing and insurance financial technology has filled a void for people around the world who don’t have access to traditional banking services in fact it’s estimated nearly 2 billion people worldwide are without bank account’s now thanks to fin tech all you need is your phone to take out a loan
Asset managers to embrace new digital technologies, for example wealth managers now have to compete with Robo advisors/Chatbot which are automated financial planning services.
High-tech algorithms these services are available 24/7 and can be more affordable than traditional asset .
Risk
Managers that helps explain why some Robo advisors already have billions of dollars under management like any growing industry. FinTech isn’t without risks and some regulators have struggled to keep up with the fast pace of innovation think of peer-to-peer lending platforms where individuals borrow and lend without going through a bank compared to traditional banks these services. They might not be required to set aside as much money in case customers default on their loans this can be risky for companies. Also , consumers data privacy is another major concern as more financial services go digital cyberattacks become a bigger risk the challenges facing financial technology are likely to grow.
More businesses go digital but for many of the companies and consumers, FinTech is more than a buzzword it’s a big business opportunity for best FinTech Investors.