If you are paying for something with your phone, transferring money using your app, or checking your bank transactions online, then you are already part of a multi billion dollar industry called ‘Fintech’.
Fintech encompasses a wide range of products, technologies, and business models that are rapidly changing the financial services industry. This includes everything from cashless payments to robo financial advisers. Everytime you transfer money to someone using paypal, that’s Fintech.
Companies that are disrupting the banking and finance industries by changing the way we pay and borrow money, is growing rapidly–because ‘investors’ are very interested. Global investments in the Fintech industry in 2017-18 alone surged 18% with more than $53 billion. And startup industries focusing on lending and payment industries receives majority of the funds. – Source: Accenture Research, CB insights 2018.
It’s not just startups that are getting into Fintech. Some of the worlds biggest companies from Apple to Alibaba are going big on it too; take Apple Pay and Alipay for example. One reason for all of this investment is that consumers are adopting Fintech fast. One out of every three people in the world’s 20 biggest economies report to using at least 2 Fintech services in the last six months, especially in the Asian countries, with China and India leading the way–with more than half of consumers using services such as money transfers, financial planning, borrowing, and insurance. – Source: EY Fintech Adoption Index, 2017.
Fintech is also filling a void around the world where people don’t have access to traditional banking services. Telkom Kenya is a good example of how developing countries have been introduced to banking on the go. Their new product T-kash Mobile Money is designed to enable customers to make payments, and access their money on the go.–allowing them to transact money, withdraw cash, pay utility bills, buy goods and services etc.–providing an easy way to transact. It’s estimated that nearly 1.7 Billion people worldwide are without bank accounts. And now, thanks to Fintech, all you need is your Phone.
Rise of the Machines
The rise of Fintech has forced traditional lenders, insurers, and asset managers to embrace new digital technologies. For example, Wealth Managers now have to compete with Robo Advisors; which are automated financial planning services (Yeah that’s right, the robots have risen, they may not look like the Terminator or R2D2, but we are in the future). Another example is Hargreaves Lansdown, the #1 online investment platform in the UK for private investors. –And thanks to high-tech algorithms, these services are available 24-7, and is more affordable than traditional asset management, and are more accurate than traditional asset managers. This explains why some asset managers have Billions of Dollars under management.
Fate favours the brave
Like any growing industry, Fintech isn’t without risks. And some regulators have struggled to keep up with the fast pace of innovation. For example, take Peer-to-peer platforms, where lenders borrow and lend without stepping into a bank. Compared to traditional banks these services may not require to set aside as much money in case customers default on their loans, but this can be risky for companies, and consumers. Data Privacy is another issue. As more financial services go digital, cyber attacks become a bigger risk.
“If there are complex problems, we like to solve them with simple solutions.”
CEO, Mitra Innovation
In the latest issue of Fintech Magazine, Ashok Suppiah talks about Mitra’s successes in supporting digital transformation of Finance, and about the digital success journey of one of Mitra’s clients, MONETA Money Bank, a Czech Republic based financial institution. Click here to read all about it.
Traditional banks may have been caught off guard by the velocity in which the banking world is changing. However, they are now fully aware of the challenges ahead, and will no doubt work to address their shortcomings by setting up Fintech services either within their product line, or through their subsidiary companies and partnerships. The challenges facing Fintech are likely to grow as more and more business go digital. However, for many companies and consumers, Fintech has become more than a Buzzword. –It’s a Big Business Opportunity, with no end in sight.
Get in touch with Mitra Innovation
If you want to be among the Fintech successes, the team here at Mitra can help you. Armed with the right people, the proper processes and best technologies, we can take you through your digital transformational journey.–We are with you. And if you like to find out more about the solutions that are available to you, and how we can help you, email us at firstname.lastname@example.org, or call us on 0203 908 1977. We look forward to hearing from you.