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Financial services are available at the touch of a finger, making today’s market easy to navigate. Read about how FinTech’s are impacting the financial system.
FinTech started in the late 1990s into the early 2000s and has exploded since then bringing the ability for consumers to move money easily. It was initially used on the back end of financial institutions but has moved over to the consumer side, making it what we are all familiar with currently. It has changed to what we see in FinTech now – an easily accessible way of making and accepting payments as well as banking and saving. Are traditional financial institutions on their way out?
How has FinTech impacted the financial industry?
There are five types of umbrellas that FinTech users can fall under:
- B2B for Banks and their clients
- B2C for small businesses
- Consumer to consumer
- Cloud banking allows for information to be shared and accessed by many FinTech companies
FinTech companies have made some of the easiest processes in technology today. These companies have made it easy for everyone to invest, borrow money, save or transfer funds through various platforms giving traditional financial institutions a run for their money. The goal is the same for both financial institutions and FinTech – to provide access for consumers to financial services.
We see that financial technology has gone all digital making it easier to do from anywhere. You no longer need to go to a bank to deposit or withdraw cash. You can buy, trade, and sell stocks and cryptocurrency without getting involved with a broker. It is as easy as finding the best FinTech that works for you and your goals
Since FinTech entered the market, the technology has automated a lot of the financial services than a traditional bank. It draws consumers that are trying to simplify how to track and control their finances.
It’s clear that FinTech is disrupting traditional financial institutions by making the former processes now easier to do yourself. This do-it-yourself way is eliminating a lot of the middlemen and in addition, reducing fees from the traditional brick and mortar bank locations. The less overhead for online-only companies is passed down to the consumer and offers higher yield interest and other functions narrowed down by market research.
Investors and companies can easily enter the FinTech sector, such as our platform Finnovating, to find start-up companies that need investment partners or companies looking to expand ideas. FinTech gives just another option to funding besides traditional banks, giving the owner or investor choices in how much they choose to participate, or where the funding is coming from.
From real estate lending and transactions to online shopping, FinTechs make these transfers immediately available and accessible to everyone. It is a variety of financial technologies to change the way we deal with personal or business finances against the way of traditional baking.
Most businesses allow virtual payment of different kinds from Apple Pay straight from your phone or watch, or we are now seeing options for PayPal or Venmo at select stores. This allows even small business owners to have a variety of ways to accept and pay for expanding their customer base. More FinTech companies are opening every day and increasing the number of Neobanks on the market. Each of them has its pros and cons, so you must research based on your needs and any goals you are trying to accomplish.
FinTech is allowing solutions rather than roadblocks. These services offered can allow funding otherwise not available by traditional financial services. The connection brings individuals to solve problems of the past by providing solutions to problems of the past. FinTech allows for the market to expand without limitations on who can open an account. Some financial institutions limit customers based on their credit ratings. This is the new age of solving a problem and allowing more people to access banking. It can open new doors for consumers.
We are also seeing how FinTech works with the budding of cryptocurrency. Available on the tips of your fingers, the new market of cryptocurrency allows consumers to dip their toes in the new trend in a safe way.
Consider your financial goals and what you would like to accomplish. With 250+ FinTech options available to anyone with a smartphone, there are sure to be at least a few that work for you. If you’re ready to step away from traditional financial services, our advance in technology has given you plenty of options to consider.
Eventually, we will see how FinTech companies become more prevalent in the market over time. Online options that are provided to customers are allowing freedom of their money from banking, savings, investing, and purchases by downloading an app that is easy to manage on the go. Catering to the market today, we see that most of the younger generations are finding it useful rather for personal use or business start-ups. Technology is building and changing every day, and financial institutions are next on their list to transform.