Fintech is a radical evolution of the financial services industry. Over the last decade, venture capital skyrocketed and the share of investment dollars going into fintech increased from 5% to nearly 20%.
This high rapid growth in recent years, driven by a combination of four main Drivers:
Fintechs are ideally placed to take advantage of opportunities arising during technological evolution.
Changing Customer Expectations:
Solutions that have the potential to impact the customer experience, such as predictive analytics, are particularly well-positioned for future growth”.
Support from the governments and regulators may lower barriers to entry into services within the financial services industry
Availability of Funding:
Easier access to funding and capital enables entrepreneurs to start new ventures in new products and business models
Global fintech saw 838 deals worth $15.1B in H1’19 and 1,895 deals worth $40.5B in 2018.
So, How does fintech help to address key issues:
1. Improving financial inclusion:
Fintechs enable the provision of new products and services to customer groups who haven’t been able to access traditional financial services.
2. Enhancing customer experience:
Fintechs can offer personalized services and communicate interactively with customers.
3. Increasing transparency:
Fintechs enable financial services companies to increase the clarity of services and products and provide transparency on fees and charges.
4. Improving security and compliance:
There is multiple fintech that helps businesses to detect fraud and manage risks and compliance issues.
5. Providing support and guidance:
Fintechs, through the use of technologies such as (AI) and big data analytics, provide tailored customer support and guidance in a cost-efficient way.
The fintech has had its start. The banks and financial institutions are catching up, though many have lost the battle without even knowing it. The tech companies are taking a hard turn into finance, directing their millions of website visitors to partners and vendors.
It’s more and more dependent on the customer behavior that will ultimately determine who wins!