The term "Fintech" stands for Financial Technology which is better understood as providing financial services by making use of software and modern technology. It was initially applied to consumer trade— financial institutions. By the end of the first decade of 21st century, the term applies to any technological innovation in the financial sector. To better understand what is FinTech and how does it work let's dig in deeper:
FinTech users encompass organizations from the B2B and B2C spectrum. Broadly speaking, there are four categories that such organizations can be staked into 1) B2B for banks and 2) their clients, 3) B2C for SMBs and 4) their consumers.
FinTech has uprooted the conventional way of doing business, reducing cost and saving time in that process. From crowdsourcing, digital banking to mobile payment and cryptocurrency, FinTech has made banking and financial institute agiler and in tune with technological advancements.
According to PWC Global FinTech report, 82% of banks and financial institutes endeavor to expand FinTech partnerships in the impending years, 77% plan to adopt Blockchain as an additional feature to support production system by 2020 and 20% predict great ROI on FinTech related projects.
1. Banking Automation Will Propel
Conventional banks are seeking finance-related software providers, which can computerize their services in order to contend with online Fintech banking ventures. All of this will connote major transformation for the conventional banking industry.
2. Investment and Financial Planning Services Are On The Rise
Traditionally, the stock acquisition was made through a dealer who takes a commission on every deal. With the onset of the online trading services (e.g., E-Trade), and investors could make their own trades for much lower fees. The epoch of day-traders was established and a huge amount of cash was lost by individuals who shaped themselves well-informed but who did not have admittance to the data as that of the other big ventures.
3. The Blockchain Will Remain “Hot”
One of the biggest problems with digital currency movement is the issue of “double-spending”, which is best described by an example. X sends a sum of digital currency to Y. It is really just a line of rules that signify the sum. Y is free to expend that amount, using a code word to access it. The problem is that the line of code which could again be replicated by X and used to procure something from Z. The money has been “double-spent.”
4. Disruption of Legacy Software Providers
About 20 percent of fintech startups are really in the business of disrupting banks. The other 80 percent are still developing software that helps banks digitize their processes as a result of which they can also operate at less cost and provide better services to their customers.
5. Consumer-Driven Products And Services For Less-Developed Countries
Banking and payment provide convenience to the fintech company that can come up with the latest innovation software or app. However, promotion of such products will be hard and a lot of speculation will go into enlightening the community and structuring up their trust as a solution.
During 2017, the growth of fintech possibility will go on to augment in relation—adding to this demographic.
6. Mobile Payments Become Mainstream
Many finance ventures are now involved in making mobile purchasing and banking, as well as the currency transport internationally, more proficient and resourceful, by cutting down on the steps involved. Innovation such as fingerprints is being attached to credit cards and bank accounts for the purpose of making expenses and purchases.
For nearly a decade banks and financial institution have faced an array of challenges, ranging from enormous customer pressure compounded with regulatory compliance issues. To alleviate such concerns, FinTech startups came to limelight, which shared the financial burden along with banks. Already, innovations such as digital banks, cryptocurrency, and many others are shaping this thriving landscape, and more is yet to be unleashed.
Many of us wonder what actually is FinTech ecosystem, so in order to understand it better let me discuss what is it consist of. FinTech ecosystem comprises of governments, financial services companies, and FinTech startups. From an innovation standpoint, the technology providers help the already-established financial enterprises with their business. Financial firms have woken up to the threat posed by fintech and are implementing innovative strategies to keep themselves off disruption. Commonly among companies, the finance experts notify FinTech projects and techies make those suggestions come to life, either on a consulting basis, mergers, or employment. Companies realize each other’s operation techniques and make similar adjustments to their product offerings. There is also increased acceptance of new technologies, as one’s addition of a certain technology helps fuel adoption.
Also, in the FinTech ecosystem companies and solutions are somewhat clustered. Many functional areas are saturated. Digital solutions are so widespread that creating a unique value proposition can be as much of a challenge as developing the financial technology itself. Many of the renowned financial services companies are reforming their services by incorporating FinTech, be it how they function internally, interact with customers or work with any other business. This is what Fintech is all about.
What is FinTech in banking?
What is Fin-Tech innovation?
White Paper By: Quali
Cloud Sandboxing for Financial Services will ensure that your applications run smoothly on your large and complex infrastructure. Financial Services applications are becoming more complex and sophisticated – embracing newer technologies while at the same time having to support core services that are based on legacy and on-premises specialized systems. This...
White Paper By: Trigent Software
In the present scenario, financial institutions are tired of the proliferation of technology innovations. Unless, financial institutions are ready to replace or transform their IT architecture, their challenges in the next decade will be daunting. This whitepaper highlights the impact of technology failure and its crippling impact on a financial institution and how technology can help reduce...
White Paper By: NopSec
The security and compliance are a major concern for the financial services organizations of all sizes in today's economic and cultural environment. So now the question arises: Is your financial service firm meeting the security compliance standards? If you are delaying cyber security and compliance, then your organization is more exposed to vulnerabilities and cyber attacks. This...
White Paper By: Adlib
Competitive advantage in the financial services can be achieved by delivering an exceptional customer experience. This, as we all know, is a Herculean task and questions like “How to drive the business growth in financial services industry?”, “How financial services are achieving technology-enabled competitive advantage?”, “How the management of business...
White Paper By: Duco
One of the main criticisms of the original MiFID was that national regulators did not enforce the directive with the same zeal across Europe. The list of financial instruments covered has been extended to almost all instruments traded in European markets – with particular emphasis on the OTC derivatives market that was previously out of scope for MiFID I. The issue with making this...
White Paper By: AutoRek
Transaction Reporting is one of the key priorities for regulators. Some are already warning that there will be no latitude for non-compliance, including late reporting. The aim of Transaction Reporting is to assist EU regulators in the detection and investigation of suspected market abuse. By implementing a robust, automated financial control regime, investments firms will ensure readiness...