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The Emerging FinTech Trends That Will Shape 2023

As the fintech landscape continues to evolve rapidly, a number of emerging trends are likely to shape the future of the industry in 2023. From financial health and digital banking to blockchain technology, there’s a lot to come. exciting opportunities that have the potential to revolutionize the fintech industry.

Top FinTech Trends to Watch in 2023

Here are some fintech trends that I believe could be key to shaping the industry in the new year:

Open bank: Open banking has been at the forefront of fintech trends over the past few years and we can expect to see even more improvements in 2023. Enabling customers to share their financial data with providers Third parties will provide more control and better financial access to data. service.

The only digital bank: It’s no secret that online and mobile banking is becoming more and more popular, especially among the younger generation. This service offers convenience at the touch of a button, allowing customers to easily manage their finances from anywhere in the world.

Artificial intelligence and machine learning: Artificial intelligence is a key element of innovation in the fintech sector. It can improve customer experience, automate processes, and analyze data to make better business decisions.

Cryptocurrency and blockchain technology: Cryptocurrencies and blockchains have been on a growing trend over the past few years and we can expect even greater growth as they become more popular. Blockchain has the potential to revolutionize the fintech industry by providing secure and transparent transactions. Financial health:
Finally, fintech companies are starting to develop more personal finance tools, financial education platforms, and programs to help support the financial well-being of society. As businesses and individuals realize the importance of financial health, these tools will provide convenience and insights to make better financial decisions.

Financial well-being is a growing trend

The cost of living crisis has had a significant impact on the fintech industry as many people struggle to make ends meet. This has led to a growing need for financial education, budgeting tools, and other resources that can help people manage their finances more effectively. In addition, rising costs make it difficult for people to save and invest money and plan for the future. As a result, people are looking for more comprehensive and personalized financial advice that can help them meet the challenges of today’s economic environment.

Financial health is expected to be a growth industry in 2023 for a number of reasons:

Continued economic instability

The ongoing economic uncertainty caused by factors such as the global pandemic and political instability has caused many to increase financial stress. This has increased the need for financial education, budgeting tools, and other resources to help people manage their finances.

technology improvements

The development of technology has made it easier for people to access financial tools and advice, thereby increasing the need for digital financial education. With the increasing use of internet-based technologies, there is an increasing trend to use digital platforms to provide financial education. This includes online courses, webinars, and more. This approach allows individuals to access financial education from anywhere and at their own pace. Financial wellness programs as a benefit

Employers are increasingly aware of the importance of their employees’ financial well-being and are offering financial benefit programs as part of their existing employee benefits package. These programs may include financial education sessions, live financial coaching, and access to financial tools and resources. The ultimate goal is to improve employee financial health, increase productivity, job satisfaction, and attract top talent.

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How FinTech Is Changing Business (and Bank Accounts)

FinTech describes technology that drives innovation in financial services. It drives automation and enhances online business, giving consumers control and management of their accounts.

Consumers and businesses can use FinTech every day through automated financial transactions and other technological breakthroughs. We’ll explore how FinTech is modernizing and revolutionizing corporate and consumer financing.

What is financial technology?

FinTech is an abbreviation for “financial technology”. At first, people saw FinTech as a counterculture movement of tech entrepreneurs designed to overturn the heavy regulations of traditional banking and lending and resistance to change. strong. It refers to the back-end processes for configuring servers and software applications for the front end of traditional banking institutions. The goal is to make it easier to send and receive money.

Today, FinTech is more difficult to define as its meaning has expanded, as has the availability of financial technology. What has not changed is that FinTech is using technology to disrupt the traditional financial services industry. In short, FinTech is an ever-evolving umbrella term for companies that use technology to automate, modify, or improve financial services for businesses and consumers.

How is FinTech changing business?

Fintech startups and established businesses serve a wide variety of audiences with a multitude of technologies and services. While FinTech benefits many customers, its technology offerings emphasize two key elements:
accessibility and speed.

Here’s what FinTech brings to companies:

Quick access to powerful financial tools. FinTech is a balancing act, giving businesses of all sizes and industries instant access to powerful financial tools. With fast, always-on Internet, big data and mobile connectivity, businesses can easily access complex, feature-rich financial software suites and managed services. In the past, such setups would have cost millions of dollars in fees, equipment, licenses, trained technicians, and dedicated IT staff.

Unrivaled business information. FinTech has created smart information screens with real-time data updates and analysis. With this information at their fingertips, business leaders have unprecedented business intelligence. They can update their marketing quickly to take advantage of favorable terms or switch to a new strategy.

Accessibility and convenience for customers. FinTech services help companies provide new access to their customers. Enterprises can provide customers with an intuitive software interface, positive user experience, fast Internet bandwidth, and more. Clients can access real-time trading and financial information on mobile devices or computers. These innovations have fueled multi-channel payment processing, mobile banking, peer-to-peer payments, and even new ways to evaluate credit applications.

What industries are being disrupted by FinTech today?

Today’s FinTech players are revolutionizing industries like payment processing, asset management, cryptocurrency, and more. Here’s how companies are using FinTech to refine and strengthen their offerings to better serve their customers.

1. FinTech is revolutionizing the payment process.

Payment processing has long been a top goal of FinTech. Consumers want transactions to be as simple as possible while maintaining the highest security standards. The best payment processing companies use the most advanced financial technology to make transactions transparent and secure. Here are some examples:

Square. Square is arguably the most well-known FinTech company in the public eye. Square has made mobile payments popular with its innovative smartphone card reader technology. Read our in-depth Square review to learn more about the fintech behind the service.

bandage. Stripe is Apple’s official partner for mobile payments through Apple Pay. It also leads in mobile-optimized, app-based payment systems. Stripe’s technology integrates with Apple’s iOS-based biometric security and digital wallet technology, allowing millions of consumers to verify into various websites and mobile apps through Face ID or Touch ID on their phones. Stripe is also our pick for the best online payment processor; Read our Stripe review to find out why.

Payfirma. In 2011, became the first company to introduce mobile card reader technology to smartphones in Canada. Since then, the company has grown to become a global processor of omnichannel merchant account services that help businesses accept credit and debit cards online, in stores, and devices mobile.

2. FinTech is disrupting alternative lending.

Alternative lending services offer new approaches to personal lending, providing lending options to more people with a quicker and easier application experience than institutions. Traditional finance can provide.

Here are some examples of FinTech-focused alternative lenders:

Prosperous. Launched in 2005, Prosper was the first peer-to-peer lending marketplace. It has withstood many changes and industry regulations to become a reputable alternative lending company.

Lending Club. LendingClub was launched in 2006, right after Prosper. LendingClub also started as a peer-to-peer lending marketplace and has seen many of the same trials and regulatory challenges in the industry as Prosper. Today it is the largest market of its kind. Obtain. Upstart is a unique personal loan service founded by former Googlers. It takes into account your education and work history in addition to your credit score to provide a more accurate loan rate. Thus, it expands loan opportunities to more people than traditional services.

3. FinTech is making its mark in asset management and automated investment services.

Automated investment services, also known as robot advisors, use machine learning algorithms and large amounts of data to make investing easy and inexpensive, eliminating the cost factor. of human advisors.

Here are two examples:

Improvement. As one of the first automated investing services, Betterment offers a website with a transparent, easy-to-follow process to help new investors get started on their journey to wealth. Improved offer low fees and no account minimums. Wealth ahead. Unlike Betterment, Wealthfront has a $500 minimum but no fees for the first $10,000 managed. It is an attractive proposition for new investors.

4. FinTech supports cryptocurrencies.

Many competing FinTech-focused crypto exchanges are willing to accept your coins, but these two are among the oldest. Their features put them above the crowd.

Kraken. Kraken is a feature-rich cryptocurrency trading marketplace that combines typical exchange functionality with forex-like management and trading. Kraken is also known to have one of the strictest security in the industry and is one of the few exchanges that operates a “dark pool”. Kraken is the first Bitcoin exchange to display prices and trading volumes on Bloomberg Terminal and the first to pass a cryptographic proof-of-stakes audit.

Coinbase. Called the PayPal of Bitcoin, Coinbase is a full-featured cryptocurrency exchange and digital wallet. Coinbase claims to be the most popular way in the world to buy and sell Bitcoin. It traded over $195 billion in cryptocurrencies in 2020 alone.

The Future of Fintech

Many investors wonder what the future holds for FinTech. Kalle Radage, COO of Neptune Digital Assets and former president of Payfirma, believes FinTech startups will continue to explore ways to support digital payments. “Smooth payments and banking mean faster growth for businesses and a better experience for consumers,” he said.

Easy money transfers have inspired many FinTech startups, and it is also a byproduct of FinTech innovation. For example, Bill Clerico founded the online payment service provider WePay to reduce friction between friends when transferring money. And the hugely popular social payments app Venmo (and its enterprise-focused Venmo business service) illustrates just how receptive people are too simple ways to transfer money.

Blockchain technology is another area of ​​FinTech that is expected to grow. Blockchain provides a decentralized, more transparent, and more secure method to track the exchange of money and other assets, including supply chain items, vehicle ownership, and even diamonds.

Other FinTech areas that will continue to grow include commercial transactions and virtual banking, more ways for businesses to connect directly with customers, and faster and more affordable financial services.

 

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Four Payment Industry Trends For 2023

The payments industry was once dominated by a handful of giants, but now sees near-constant market entry by fintech companies, each offering disruptive thinking and technology. new technology in this field.

This means an innovative mindset must become the norm for any brand looking to influence payments. As we’ve seen in retail, media and banking, user expectations are changing rapidly, so our industry needs to change quickly (faster, in fact). The following four trends will be key in determining the evolution of the industry over the next 12 months:

1. Mobile payments

The world is increasingly moving towards a cashless future. As with many other digital aspects of society, this transition has accelerated throughout the pandemic. Businesses around the world have decided to stop accepting cash to protect their employees and try to prevent the spread of the virus.

But now, with the world reopening, many businesses continue to go cashless as part of the new normal. UK Finance – a trade association of the UK’s banking and financial services industry – has predicted that within a decade, banknotes and coins will only be used for 6% of payments. But it’s not just hygiene that promotes this; Consumers in general are turning to digital channels because of the convenience they bring. For example, mobile payments use fingerprint authorization, which means you can still make purchases if you leave your card or cash at home.

The popularity of online payments, which cannot be done with cash, has rapidly increased the number of digital transactions that take place every day. Plus, it’s much easier to store all your coins securely in a digital wallet instead of counting change – and less cumbersome to carry around. It’s also better for money management because apps can view every transaction, eliminating the need to add up receipts. In the past, there have been debates about inclusivity. But with 91% of the world’s population expected to own a smartphone by 2026, there seems to be no reason to return to a majority cash payment system.

The next step is to find a way to ensure that digital payments are more widely accepted as part of B2B transactions, as currently 50% of B2B payments are made by check. There has been an increase in the pace of movement in this direction, with a number of B2B payment processors reporting massive growth in recent years. But it’s mostly just a shift in usage from checks to cards, thanks in part to lower card network speeds. The next hill to conquer is to move them to digital wallets.

2. Trust

Many times, when asked the top reasons for giving up selling online, customers cite safety. Or rather, the lack of security noticed during the checkout process. Unfortunately, the fear of fraud is on the rise. Research has found that 62% of people now accept fraud as an unavoidable risk when shopping online, and 59% are more concerned about fraud than they are in 2021. These concerns are not unfounded – fraud has skyrocketed in recent years, with year-over-year figures 30% higher than in 2020.

Trust is an important element of any financial service provider. When people’s livelihoods are at stake, it is essential to ensure that their funds are available both where they are stored and transported. Here, the processors have the added responsibility of reassuring customers about the security of their payments, even though there is no actual transfer.

According to a study by the European Commission, the misuse of personal payment information is the second most cited reason for not making an online purchase. Adding visible security elements, such as two-factor authentication, reliability, and credentials for backups is crucial for any payment processor. If they are successful, they not only reduce their risk of fraud, but statistics show that they are also rewarded with a significant increase in sales.

3. Differentiation

Driven by new technologies and changing regulations, the payments industry has grown significantly in recent years. If anything, things are starting to get a bit crowded. New startups are closely following the biggest players, but to succeed, they need to make sure they make a difference.

The easiest way to do this is to reduce prices – this is when advances in cloud computing and hardware greatly reduce transaction costs for customers and merchants. Though there is only one so low they can drop before further cuts become impossible.

Payment service providers can differentiate themselves from the competition by finding ways to make their services increasingly convenient to use, thereby improving the customer experience. For example, PayPal is known for capturing small companies that produce cutting-edge technology. But convenience can also come from integrating with existing software. Since P2D2 – a European regulation aimed at making electronic payments safer – gave way to the opening of banks, payment processors have more leeway in how they can help customers. spend money from different accounts.

4. New technology

Artificial intelligence (AI) is an important way for payment processors to improve security and customer experience while helping to cope with the growing volume of digital payments facing the industry. face.

The AI ​​can automatically and accurately flag transactions it considers unusual, such as particularly large transactions or those made by an unsuspecting person. It can also use machine learning (ML) to fine-tune its operations, understanding each customer so that they are not prevented from making important but unusual purchases. With millions of purchases made every day, it’s not possible to check each one manually. But AI and ML secure legitimate payments much faster than humans can, contributing to better customer service.

AI can also enhance the customer experience by improving customer service interactions. For example, it has been used to power chatbots that can answer simple queries, allowing payment processors to provide round-the-clock customer service. It can also create or cancel long-term orders or direct debit, reducing human intervention and streamlining the process.

Use today’s trends to shape tomorrow’s success

The evolution of the payments industry and the growth of the financial technology industry, coupled with advances in technology and growing customer demand for flexible payment methods, pose challenges. and opportunities for payment processors in the coming year. Those who can meet customer needs by leveraging technology to develop exceptional products and services, provide global security, and win users’ trust will be decisive. lagging behind the leaders.

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Is the neobank bubble about to burst?

Ongoing economic uncertainty and inflated valuations are having a dramatic impact on the fintech funding cycle. Last year’s numbers paint a bleak picture – according to CB Insights, fintech companies raised $20.4 billion in Q2 2022, almost half the amount raised in the quarter. 2 years in 2021.

With fintech valuations and start-up capital plummeting in 2022, combined with the threat of a recession looming, this begs the question: can neobanks, which have grown during the COVID-19 pandemic, have Are they facing a decisive moment?

The COVID-19 outbreak has called for immediate changes across the financial services industry, including new and urgent demand for contactless online services. According to Statista, almost one in five banks (18%) have launched contactless payment methods in response to digital services. As branchless banking begins to take the lead, a new generation of banks – digital-only players – are well positioned to rapidly accelerate the digitization of financial services. But with the number of neobanks around the world exploding since 2019, neobank newcomers are facing new challenges to secure their future.

Neobanks face economic pressure

Despite its high valuation, it is currently estimated that only 5% of neobanks break even, let alone make a profit. Neobanks depend on high levels of investment, but with an impending recession, investors are writing fewer and fewer checks. Indeed, global fintech funding fell 37% quarter-on-quarter in Q3 2022.

With less capital flowing into the sector – and especially as fintech have yet to prove their capital effectiveness – neobanks face a tough road. Meanwhile, rising costs of living could prompt people to retreat to their “first” bank accounts to weather the recession. The allure of convenience means that many people have a “secondary” neobank account, but some may be willing to forego it to play it safe with fully licensed, traditional banks when thinking about it. the economic recession began.

Both of these factors are weighing on financial services firms, with costs rising and profits falling.

Unsustainable business model

Neobanks’ underlying business models are under strain. As a cash-intensive business, it relies on consistently high levels of funding, but its revenue model remains vulnerable, with the costs of acquiring and retaining customers also rising as competition grows. competition is getting fiercer.

Most new banks offer two things: a mobile app and a debit card (powered by Visa or Mastercard). Because they are so focused on growth and staying ahead of their competitors, they rely on low card fees and low exchange turnover to attract users and thus miss out on conversion card fees, monthly fees, transactions, etc. Instead, their business model is based on incentivizing customers to upgrade to a premium account that offers additional benefits – and a monthly fee. In addition, they can provide customers with services such as insurance, cryptocurrencies, and loans.

The challenge is that only a small group of customers will upgrade to premium accounts while selling more services proves difficult as all the new banks are competing on basic paid services. alike. Assuming that new banks rely on these premium services for revenue generation, the nature of adding these expensive products and services to their offerings presents a dual effect on the establishment and their cost structure, hindering their path to profitability. Neobanks with their own banking license will naturally be more protected from future contractions. Meanwhile, those who rely on a traditional bank to process transactions like a world-class F1 race car builder have to rely on competitors for tires, steering wheels and even people. drive. Relying on third parties for core components naturally leaves neobanks vulnerable to external factors.

Compliance issues for neobanks

Today, anchor banks also face increasing scrutiny over their compliance systems. Amid the cost of living crisis and the rise of financial scams, regulators are probing new banks to ensure they have proper fraud and compliance systems in place.

Many new banks face an uphill battle to evolve their compliance programs to accommodate the new products they offer. Early-stage fintech often lacks the resources of a traditional financial institution to staff and operate internal compliance systems, with the C-suite often focused on rapidly bringing in new products to the market.

However, as regulation catches up with digital innovation across the industry, new banks need to invest in teams that can manage these processes, build greater trust in their services, and promote better customer journeys. If new banks want to put themselves on par with their physical counterparts, they need to make compliance the importance they deserve and strengthen their defenses against financial crime.

Goliath’s revenge on the card?

Competitive threats to neobanks from existing providers are also increasing, as traditional banks and fintech giants begin to step on neobanks.

Chase UK, the new bank equivalent of J.P. Morgan, has attracted over £8 billion in deposits and reached half a million UK customers in just eight months of its launch. Meanwhile, fintech giants like PayPal aim to be a full-blown finance app, offering a competitive array of features to those considering moving their finances to neobanks. As competition from established players increases, differentiation will become essential for new banks looking to strengthen their position. Larger companies will naturally have access to a larger set of customers, which means new banks will do a good job of targeting a specific niche that traditional providers have. does not meet the. This could mean meeting the needs of the financially disadvantaged, self-employed or young people.

Another option is to stand out through a digital experience. While the established banks are entering the new banking space offering features and rewards, the USP of the new bank lies in its ability to provide an engaging and personalized user interface. The products offered may be the same, but customers will naturally turn to solutions that can meet their needs and are simple and intuitive to use.

The advantages of neobanks are many. First, they have minimal costs and are therefore able to maintain lower rates than traditional banks. Second, technology is part of their cultural DNA, which means they can react more quickly to threats or opportunities. It also means they can offer a more streamlined referral and KYC experience, as well as innovative features like a budget visualizer. And third, they have access to a broader customer base, with lower barriers to entry for customers with lower credit scores or who cannot meet traditional requirements. To survive, new banks must hone these advantages and outperform their incumbent counterparts.

However, both sides now face the threat of integrated finance, which is redefining the banking space. Non-banking brands are increasingly offering their customers financial functions, which raises questions about how relevant traditional banks, or even new ones, are when it comes to banking. customers can access credit and other banking products directly from their favorite brands.

Where does that leave neobanks?

The era of “cheap” finance is over and providing services below cost is no longer feasible. The way new banks are set up doesn’t provide a quick enough path to profitability, and the relative amount of capital means they need to think carefully about their next move. Indeed, even the biggest fundraisers pale in comparison to the financial resources of traditional banks.

Innovation and differentiation are essential to the survival of neobanks. Ant Financial is a prime example of a new bank that has rocked the Chinese financial space, currently valued at 50% more than Goldman Sachs. This has been made possible by the uniqueness of its value proposition:
combines social media, e-commerce, and payments. Ant is the largest money market fund in the world, and what’s interesting is that it profits from excess funds, meaning consumers move money from their checking accounts to their Alipay wallets.

More than ever, anchor banks’ chances of survival will depend on experience and commitment to their clients. As the “architect of choice” of potential changes in our financial services habits, neobanks will always have the opportunity to deliver real disruption – or risk to others. seize the opportunity. As new banks ponder the future, expect to see the rise of technology-driven companies that leverage integrated finance and provide their vast user base with a seamless service experience. simulated financial services. Going back to the Chinese FS market, we can imagine social media companies taking bold steps and adding an FS experience layer to their offerings. Could Twitter be the next big bank disruptor? Let’s see what the future holds for us.

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How are Younger Generations Choosing Financial Service Providers?

Younger generations are demanding accessible digital banking services from their providers. They turn to neobanks and fintech unicorns like Robinhood to do their banking, payments, and investments. Neobanks, the bank in which all their services are online and accessible digitally, and the fintech unicorn, the startup that has reached a valuation of $1 billion, are attracting the next generation. children with their first digital products.

Fintech’s growth is undeniable – around the world, we see their growing success. It is predicted that there will be just under 50 million neobank account holders in the United States by 2024. Monzo, a UK-based challenger bank founded in 2015, is now valued at $4.5 billion, proving the huge profitability of targeting the younger generation with digital banking services. Most of Monzo’s customers are under the age of 34 and actively monitor and optimize their funds.

Generation Z enters the financial market

Born between the 1990s and early 2010s, the oldest of Generation Z are looking to invest and find mortgages, while the youngest are opening their first savings and checking accounts. their ancestors. The focus is on millennials, but Gen Z is not a generation that can be ignored and is quickly becoming a profitable customer base. But what do they expect from their financial providers and what attracts them to new fintech players?

The importance of support

As the first generation to be digitally native, Generation Z is more comfortable with technology to make money. Most of them have grown up during the 2008 recession, and the oldest of them are entering the workforce after the pandemic with another recession and the cost of living crisis looming. stalking. This has led the generation to look for a trusted advisor when looking for financial services.

The emergence of “FinTok,” a community on the popular app TikTok for sharing financial advice, in recent years, has demonstrated the value of the human touch. Since exploding during the lockdown in 2020, TikTok has ceased to be just a popular dance video-sharing app. It is an educational resource for the younger generation, also a video application and a search engine.

In particular, FinTok is a community that provides tips on personal finance, investing and cryptocurrencies or saving money during the cost of living crisis. There are a number of TikTokers who made a career by providing financial literacy to the younger generation.

Traditional banks are starting to find their way to TikTok, but the bottom line is that Gen Z is looking for trustworthy advice on money management, and once they absorb that information, they’ll be ready to take advantage of the benefits of Financial Services.

Build trust

As a digitally savvy and socially conscious generation, Gen Z is looking for a financial institution they can trust not only with their personal data, but also to provide reliable services. meaningful and positive impact on the world. By embedding ESG in banking, financial services are aligning with Gen Z values.

Younger generations are acutely aware of the importance of personal data, identity and credit protection when doing digital banking. Leveraging cutting-edge AI technology will enable banks to attract and maintain market share for the younger generation by delivering a personalized experience through an intuitive and sophisticated user interface, with blocking capabilities. Advanced fraud. AI is enabling financial institutions to move from providing services to creating end-to-end user experiences.

For example, make recommendations to customers as they shop, or make more informed decisions about customers based on their data.

Banks and financial institutions that cannot rethink their banking and lending operations with a digital mindset will not be able to compete with new banks and rising fintech unicorns. Large financial institutions have already begun looking to reach the younger generation by increasing the availability of digital services, but more needs to be done to ease account access and check balances. ESG, education and personalization to compete with the growing competition of fintech.

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How Fintech Is Working For End-to-end Banking Solutions?

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?

Digitizing

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

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.

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