Stepping into a New Phase of Transactions with Fintech
FinTech, the fusion of finance and technology is revolutionising the financial industry. As new technologies get introduced into the financial sector by young start-ups and tech firms, traditional firms are faced with the unique challenge of adapting to a shifting financial landscape. FinTech’s scope of activity is broad and ever-evolving, beginning with elements like mobile payments, money transfer, and crowd-funding, and progressing in the newer world of blockchain, cryptocurrencies and roboinvesting.
The Covid-19 has fast-tracked digitisation initiatives as well as decision-making processes to ensure that trade deals get signed and financed, and there has been some remarkable progress made in pockets of the industry over the course of the last few months. The digital transformation that we’ve witnessed in such a short timeframe is not one that we would have anticipated this time last year. FinTech companies have always been and will continue to be important innovators in the trade space. With expectations high, and levels of patience low for the continued acceleration of digitisation and for projects to be delivered, the pressure is being mounted to these firms as their claims are increasingly being put to the test. As the tech savvy millennial generation aged, the normal functionaries of banks became digitised. But banks aren’t the only financial institutions that have made tech-driven changes. Entire markets form digital loans to mobile stock services, e-commerce payment platforms and digital currency exchanges are rooted in digital financial access.
FinTech solutions use technology to reduce cost, simplify processes and widen the market for their services. FinTech technology companies, more commonly referred to as FinTech companies generally focus on disrupting specific business models through financial innovations. Relying upon technology these companies work to make business processes simpler, reach a wider audience, or focus on specific customers. Between 2012 and 2015, FinTech companies witnessed exponential growth in investments worldwide. In 2017, the total amount of investment in the sector stood at US$50 billion. It skyrocketed to a whopping US$111 billion in 2018. Several innovative financial services and large FinTech companies are driving growth by attracting investors who are offering new financial products and services.
However, FinTech companies maintained a low profile so far. But they unequivocally proved their value and importance in 2020, leveraging people and their businesses with flexible solutions to maintain some semblance of financial stability in the year that was anything but stable. Since they evolve in an industry where the money is a commodity, FinTech companies that implement successful new business models often reap large benefits very rapidly. In many cases, innovation in financial technologies comes from the creation of cryptocurrencies such as Bitcoin and Ethereum, and even more, the underlying Blockchain technology that allows their decentralisation and security.
As a booming industry that is continually changing the legacy institutions by disruption and the rapid pace of changes, financial technologies need people to fuel the progress. The interest in the FinTech industry is at its highest at the moment, and there is little surprise that many people are breaking into FinTech. Whether one is aiming to get a job in the industry or start a company that provides an apt solution for people, FinTech is a fine place to start with.