A digital banking revolution is upon us. It is changing the way people interact with financial products and services. The financial sector has been empowered by data-driven tech companies who want to make financial services more accessible. At the heart of this lies its core that is Fintech, short for financial technology.
Fintech lies at the crossroads of financial products and technological advancements. So, when you combine these two, you get access to improved banking products. It helps blur the lines in the world of banking and strives towards providing a more fulfilling experience.
Then again, if you look at the banking world, you will see that Fintech is succeeding where traditional banks were failing. It’s not that these Fintech companies pushed their way through. The banks themselves had created a big void. This void needed filling. Moreover, consumers as we know them started changing. Technology made them self-aware. As a result, they expected more from service providers.
If banks cannot provide them what they want, in a way they were being forced by the banks to go to these Fintech firms. This segment has become popular and is constantly changing the banking world because it focuses on the customer.
They know that technology is important to people now. So, there’s no harm in using that information and improving everyone’s lives. Services have become cheaper as a result. People are saving money and at the same time, they feel satisfied. What was expensive before is now cheaper thanks to these companies. Innovation is at an all-time high and Fintech is currently riding the high tide.
How Fintech Emerged In This World
Fintech has existed since the beginning of the 2000s. But it truly spread its wings and became popular during the financial crisis of 2008. Banks were unable to loan out money at this time. They had started using strict regulations. So, a void started to open up. The credit sector was in shambles. Here’s where Fintech came in and saved the day. People who were previously being turned away by the banks suddenly saw this beacon of light shining in the distance. The rest is history.
As years went by people lost faith in the traditional banking system. Everyone wanted to give Fintech a chance. Since they were having a great experience, they asked their friends, families, and colleagues to use these services as well. Since banks never focused on what the customer wanted, Fintech companies edged past them. Here, consumers came first. More importantly, these companies could solve their financial problems.
How It’s Changing Everything
Look around you. You will see that every single person has their own set of problems. And, each of them is looking for a solution. This is something that Fintech understands. So, they focus on solving people’s problems. They innovate and offer services that are essentially solutions. This is how they stand out if you compare them to brick-and-mortar banks. In fact, places that have been underbanked, now have access to a basic amenity like banking thanks to Fintech. It provides people with real-time banking solutions that generate new value streams.
It has created a new era unto itself via its innovation and job creation. However, that does not mean that Fintech just wants to monetize data. The truth is, it shows how you can extract value from your data. So, Fintech companies are not mining data but using deep learning processes to serve you efficiently. For businesses, Fintech companies have created a safer place that promotes transparent digital transactions.
However, people have the same basic expectations from online and offline financial institutions that they had a century ago. They expect security so that their wealth is safe, convenience so that it is easy to access their money and swiftness in conducting transactions.
What has changed is the details of these expectations. A century ago you would want your bank to protect your money from robbers. Now you would expect them to protect your money from hackers. In terms of convenience ATMs were a great advancement 50 years back but now the internet and mobile banking are more convenient. However, this does not mean that ATMs are irrelevant. But, it means that Fintech companies understood these slight changes in basic expectations of people.
The Way Forward
Now, banks have identified Fintech organizations as potential allies. While banks can take advantage of the tech they have to offer, Fintech companies, in turn, get access to large customer-bases. It’s a win-win for both as well as the customer who gets the best of both worlds. In fact, a lot of banks have already started partnering up to provide better services to their clients.
Banks who have been struggling to go digital can now use the expertise of Fintech companies to improve themselves. For a lot of traditional institutions, this can prove to be a second chance to bounce back into the business.