Financial Technology or FinTech is completely transforming the way financial services companies function and how the businesses buy, protect and manage wealth in this FinTech era. In 2016, the greatest challenge for the banking industry is FinTech. FinTech is although the latest trend in this domain, it cannot be said as a new one. In the past, it referred to a group of modest startups offering online lending or retail-payment services.
FinTech has entered the mainstream swiftly. Now, it is not constrained with mere startups. Some prominent FinTech companies include Lending Club, business giants such as Google, Apple, and Samsung. The novel services delivered by such companies comprise Financial Services Applications, which are often more effective and less expensive than the conventional companies. With the copious services offered, FinTech companies are attracting customers in mass.
FinTech Advancements in 2016
FinTech firms propound digital financial services and alternative financial instruments via the internet, digital payments including electricity, mobile bill payments etc., cross-border peer-to-peer payments and e-Commerce transactions. Businesses use FinTech for marketplace lending (peer-to-peer platforms) as well as personal loans. Recently, Robo-advisors are engineered for effective wealth management services. Online Crowdfunding (equity-based) and Venture Financing are the two major services FinTech focus on. Recent statistics accounted the Transaction Value in the FinTech market to mUSD 769,323.4, and the average transaction value per user in the Digital Payments segment sums to USD 2,683.82 in 2016. The transaction peak value globally reached is in the U.S.
Financial Growth through FinTech
Modern businesses can reap great profits by the effective utilization of the new technology. Apart from spending more money on in-house product development, evaluating third-party technology providers on the basis of what they provide and how well the technology suits the business, software and applications that fit for the business can be integrated into it. Before selecting any solution, an organization must identify its investment themes, evaluate credit card exposure, manage the counterparty risk and so on. Entering into a FinTech pool hassle-free leads the business to the market’s paramount, expanding upon the organization’s core market.
Every organization should widen their institutional expertise to screen pioneering technologies that arrive in the market, in a constant manner. The expertise must include perception into client preferences, the features to integrate new technologies and undo when newer ones arrive and to establish external links with other companies. Many of the well established companies have adapted this technique to amalgamate new technology with their business. They train their employees and mentor properly in order to acquire the necessary skills.
Bank-FinTech Effective Association
The Bank-FinTech association is an effective way for the banks to enter the FinTech ecosystem, which aids in smooth functioning and positioning them at the very core of the industry that redefine payments. FinTech startups are always open to receive support and investment from the banks in order to initiate their business,develope and achieve their targets.
Without any doubt, FinTech brings in-depth technology expertise along with enhanced design speed and manufacture rate. However, bank’s expertise in the ins and outs of the payment systems and choice of services is matchless.
Up-And-Coming FinTech Future
Certainly, FinTech is going to have a bright future in 2016 as well as in the upcoming years. FinTech companies assist in instructing consumers to make better financial decisions, protect their assets from frauds, enhanced online shopping experience, encourage investment and much more. Innovative FinTech companies like Invoice Ninja provides services for helping small business owners get their invoice bills paid faster. And several other companies like Trulioo is seeking new solutions that make financial institutions and businesses integrate with new compliance directives within their transaction processing software.
Wealthfront, Addepar and Robinhood aim at empowering investors by making them feel comfortable and relax enjoying the splendid benefits from FinTech. Firms like LendUp offer customers, that banks usually decline, providing them with lower credit scores access to short term loans without any rollovers or hidden rates and also in low interest rates. Similarly, companies like SoFi are supporting businesses and customers to refinance the existing loans, education loans and mortgages to get better rates, thereby increase financial status. Another FinTech company LendFriend gives opportunity to individuals to borrow and lend money to their friends, family or relatives, or whomsoever they wish.
FinTech innovation has the potential to transform financial service firms. The smart and fast technology has the capability to win the market, whether it is alone or whether they sell into or collaborate with existing providers. The ultimate beneficiary of FinTech is literally the customer. There is no doubt that FinTech will reign the financial services firm with its utmost powerful services and tactics that lead to supreme successes.