1. It’s easiest way to do banking
Technology is changing the way we live, work and play. It is impacting all aspects of our lives from health care to education, transportation to food production. In finance also, technology is driving new ways of doing business. Fintech is an umbrella term that refers to financial services companies using technology to design new platforms, products, and services in response to new customer needs. These innovative businesses are transforming the financial sector by providing easier, faster, cheaper and more transparent services than ever before, and making it possible for consumers to take charge of their own finances at low cost and high convenience.
As we know today, people are getting attracted towards online banking due to ease and comfort of transactions. Nowadays, it has become extremely easy to make online payments without having a bank account. With the help of mobile devices, you can quickly check your balance, transfer money between accounts, pay bills and even send money directly to someone else’s account. Even if you have no credit history, there are numerous websites that offer instant loans for personal use. So, it has become much easier to get access to funds, whether you need cash or want to invest. The whole process becomes simple, quick and hassle-free, which is what makes it so attractive to everyone.
The fintech industry is growing very fast worldwide. According to a report published by Accenture and the World Economic Forum, the Fintech market will grow to $1 trillion over the next five years and account for nearly 5% of global GDP growth. While this may seem like a huge number, it is still just a fraction of the overall $80 trillion worth of assets globally. At the same time, almost two thirds of the respondents said they expected their company to expand its Fintech product offerings over the next 12 months. This means that more and more banks around the globe are opening up to the possibilities of Fintech.
2. It’s growing very fast world wide
According to Forbes, there are 478 FinTech companies across the globe. They include everything from tech startups to established brands such as PayPal, Facebook, and Apple. There are many reasons why Fintech is attracting so many investors and venture capitalists. One of them is because it allows companies to reach a larger audience of customers. As technology continues to advance, more and more people are turning to these apps as well as other digital channels for their financial needs.
In addition, the rise of social media has also created a perfect opportunity for FinTech services. The popularity of sites like Instagram, Snapchat, and Twitter has brought about a lot of interest for new products and services related to money. From the perspective of FinTech, the number of users are rapidly increasing, and businesses are finding themselves competing for increasingly small markets. For example, according to Bankrate, the average American uses 8 different checking accounts during the course of a year.
Another reason that attracts a lot of attention is the fact that the Fintech industry is able to change the way the entire financial system works. Because of the technology, we are able to move away from traditional methods and go straight to the source of information. It is also important to mention that most of the Fintech companies focus on developing their products with the goal of improving user experience and lowering costs for the final consumer.
3. All types of banking customers can be targeted
Today, there is a large variety of customers who can be reached by FinTech companies. For instance, FinTech startups are focusing on younger generations since they tend to spend less time saving money and more time spending it. However, it does not mean that older people cannot benefit from FinTech. It is true that as you age, you might have less disposable income, but the amount of money spent on savings and investments tends to increase, and you can rely on your retirement fund to provide you with sufficient income. If you find yourself in one of those situations, you can always count on FinTech companies to provide you with the tools you need to save money and achieve your financial goals.
Many FinTech companies target specific groups of customers, offering special features to meet their needs. For example, some FinTech companies specialize in offering loans for small and medium sized businesses (SMEs), while others focus on small entrepreneurs and freelancers who might not qualify for traditional forms of funding. Others try to serve customers who have low incomes and therefore lack access to traditional banking products.
4. Interest free and Shari’ah compliant products has a unique market worldwide
One of the biggest benefits that FinTech offers is the ability to reduce transaction costs. Most of the time, traditional banking institutions charge an enormous fee for processing a single transaction. For example, if you want to open a new savings account, you might expect to pay hundreds of dollars. However, FinTech companies usually don’t charge any fees or very tiny and affordable fee.
Another major advantage that FinTech has over traditional banking is that it is Sharia compliant. Financial institutions should comply with Islamic laws, including prohibitions against usury and interest. These rules are strictly enforced in countries where Islam is dominant. But FinTech companies often operate outside of the country’s borders and thus are able to offer interest-free loans.
5. It could be integrated with a marketplace as it’s trending now
The rise of Digital currencies are another great step forward for the FinTech industry. Digital currencies are becoming popular among both businesses and individuals, and this trend shows no signs of slowing down. One of the advantages of using digital currency is that it eliminates the need for intermediaries. Instead of dealing with a third party, you can conduct transactions directly between parties. Therefore, it is possible to connect the blockchain technology with various existing payment systems and create something completely new.
Blockchain technology is a decentralized database that is constantly updated and stored securely on computers around the world. It is designed to eliminate fraud and ensure security, reliability, and transparency. For example, it is possible to integrate blockchain into a marketplace, allowing buyers and sellers to transact directly. And these transactions can be carried out with absolute certainty.
So, as we see, FinTech is the future of online banking, and it is only going to accelerate further. We are seeing an explosion of innovation that is creating entirely new opportunities. Not only can FinTech companies improve how we do business, but they can also bring new products to market. With the right approach, it is highly likely that FinTech will continue to dominate the industry in the next few decades.
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