FinTech is a rapidly growing industry that has redefined collaboration between financial services as well as the latest technologies. Banks that are currently using FinTech for their long-term prospects can see successful developments and increased competitiveness in all areas.
According to a recent report, the Global FinTech Market is valued at $194.1 billion in 2022 and is projected to continue to reach $492.81 billion by 2028, recording a total compound annual growth rate. the year is 16.8% from 2022 to 2028.
The latest statistics simply imply that FinTech is an emerging force ready to bend the rules of the banking industry and deliver extraordinary end-to-end banking solutions wherever they are found. use.
This powerful economic engine has increased the influence of technological advancements in the banking sector, all thanks to the outbreak of the global pandemic, which has once again had a positive impact on the speed of banking. degree and flexibility of this banking sector. Now, before diving into how FinTech works towards an end-to-end banking solution, let’s first take a look at some of the reasons why FinTech is growing in 2023. You must understand that an application development company A dedicated FinTech can give you what you need in perspective if you want to invest in the same for your business and retain customers for the long term.
Why is FinTech experiencing an irresistible surge?
The rise of FinTech in the banking sector is strongly dictated by the weaknesses of traditional banking and this is something we have all witnessed in recent years. Here are some reasons why FinTech has overtaken traditional businesses:
Hundreds of compliance rules have made traditional banks rather strictly regulated as well as rigid.
Traditional banking usually leads to higher operational costs considering they have multiple brick-and-mortar branches across the country.
Traditional banking doesn’t go beyond the business constructs as they often have to answer the public. Now, this prevents them from making way for increased disruption by launching and implementing new technologies.
Banking operations are backed by lower customer engagement.
There isn’t any investment opportunity lying in the street just for innovation and technology.
Traditional banks don’t offer much heed to offering individual profit-making products.
Today, FinTech has revolutionized two concepts that have kept traditional banking alive for so long, and those two are lending and payments.
- Now, FinTech companies have made borrowing and lending money easy even for SMEs, creating a win-win situation for all parties involved. Their peer-to-peer lending model allows participants to lend and borrow money in real-time, making it easy to track access, and secure.
- The increasing use of smartphones and easy access to multiple data networks have disrupted the most important aspect of traditional banking, which is payments. Now users will no longer have to give huge amounts of money to middlemen and make easy transactions in minutes with just a few clicks here and there.
Now that you have considered how FinTech is exploding, now is the time to move on and understand how FinTech works for end-to-end banking solutions.
How is FinTech changing the standards of terminal banking across industries?
One surefire way for FinTech to change the face of the banking system is to get rid of the whole concept of physical banking. Now, modern FinTech solutions are available on all smartphones allowing users to transfer funds to and from accounts, communicate and get instant help with chatbots, and use a variety of cash register tools. investment and lending. All of this can be done with one device without the need for a bank. It saved banks extra money by not funding multiple additional branches just to provide support to their customers when it could be done simply online. In addition, FinTech has also helped banks to solve the problem of cybersecurity by enabling a number of authorizations and other security protocols.
Reduced transaction fees
Another use case of how FinTech is changing the standards of traditional banking and helping customers is eliminating transaction fees. Now, users have turned to FinTech apps to transact because they don’t charge large transaction fees compared to traditional banks, which will eventually charge a large sum for the same transaction.
Convenient user experience
Now, FinTech solutions offered in different countries give users many opportunities to choose the product or service they are looking for, all with the help of AI and ML. Customers no longer need to consult directly with a certain banker when choosing a mortgage package. All they need to do is answer a few important questions about the app and reach the best solutions to their problem in minutes. The smartphone’s facial recognition feature further ensures identification and facilitates the verification process.
Blockchain technology embedded in FinTech applications allows users to make secure transactions instantly and manage their financial assets more efficiently without paying entire fees to third parties. Banks are finally starting to use blockchain technology in their applications and offer their customers the ability to transfer financial values at any time of day.