Fintech defined as techno-financial evolution that has seen great success. Here you will go through the top 8 reasons that made FinTech so crucial and important in the surging technological world.
Today’s world is digital and finance is no exception. Things are now easier and faster with digitization, and so is finance. The digital revolution is transforming the world of finance. Technology is evolving at an unprecedented rate and hence the financial industry is at its peak. FinTech is a global digital payment trend in which technological innovations help finance to be more democratic and efficient. Fintech is one of the most important features in today’s economy and finance.
So if you are interested in finding out why FinTech is important then keep reading because in this blog post we are sharing the top 8 reasons why FinTech is important. But first, we’d like to explain a little bit about FinTech.
What Is Fintech?
FinTech is a combination of two words, “financial” and “technology.” This new technology was originally developed for use in the back-end systems of well-established financial institutions. Nevertheless, FinTech then evolved into a huge financial industry, and improved and automated the delivery and use of the financial services sector.
The goal of a FinTech startup is to support companies, business owners, and customers to further manage their financial operations. Over time, FinTech has shifted to consumer-oriented services and now encompasses various sectors such as retail banking, education, fundraising, insurance much more. You can also use FinTech to develop and use cryptocurrencies such as Bitcoin.
Reasons Why FinTech Is Important?
1. Access to the digital financial world:
New financial services are available online and anyone with access to the internet or smartphone can benefit from this mobile financial software. They don’t even have to visit the bank or any other place. Although you live in a country that does not have the traditional banking infrastructure, you can still get your financial support.
Compared to corporate and retail banks, the FinTech software solutions are often less expensive. Their mere presence helps to place downward pressure on many of the fees which banks often charge. FinTech solution providers reduce costs by offering prices according to supply and demand.
3. More Secure:
FinTech is safer than traditional banking. When it comes to adopting cybersecurity, the pace of the traditional bank is slow. The foundation of FinTech relies on technology, while traditional banks consider it a simple essential accessory to their current testing model. Traditional banks do not focus on technology like FinTech. Therefore, FinTech is more secure as cybercriminals cannot penetrate the system easily.
4. Economic Development:
FinTech firms are among the fastest-growing firms in tech. This is a high-tech-leveraged business that focuses on smart automation, machine learning, and big data. EY’s Global FinTech Adoption Index in the year 2019 shows that the adoption of FinTech services has increased from 16% in 2015 to 33% in 2017, and reached 64% in 2019.
Also alone in China, the adoption rate of FinTech is 95% due to money transfer and payment applications. Top FinTech trends 2021 are autonomous finance, open banking, voice technologies, etc.
Thus, FinTech has not only developed the growth of the economy but has also established new successful careers in the industry.
5. Empowerment Of Business:
All businesses can achieve immense benefits through FinTech software solutions. Small and medium enterprises require more economic growth than well-established enterprises. And they often face difficulty in acquiring the financing needed to thrive. Modern financial technology products are efficient and effective, and they also provide access to a variety of rich funding options to small and medium enterprises.
These options are designed to meet the needs of small businesses. This digital payment solution also includes marketplace lending, invoice finance, merchant and e-commerce finance, online supply chain finance, and online trade finance. FinTech enables well-established businesses to further expand their services, operating at higher efficiency and scale.
6. Transform Company’s Massive Data Into Meaningful Data:
Businesses can gather a lot of massive data based on their buyers, sales, website traffic, and many other data points.
FinTech assists companies understand and manage the data they gather. By developing tools and processes FinTech transforms all big data into meaningful data. Thus businesses can analyze patterns and trends. It can also create reports which will help businesses to track new ideas and useful information so that an effective strategy can be developed within their industry.
7. Fast processing of complex transactions:
FinTech has made many impossible things possible. With the use of mobile money solutions processing complex financial transactions in the blink of an eye and settling all accounts properly is easier than ever before.
Also, financial technology provides more specialized services. They concentrate on customer needs, flexible and agile, serving customer segments. And due to a lack of capabilities and flexibilities, these all services are excluded by traditional banks. Therefore FinTech has become more crucial in every industry.
8. Enhancement of conventional financial services:
There has been a major improvement in financial services, which has promoted the legacy system through innovative new solutions. It can offer benefits to consumers and other economic sectors. The banks became acquainted with their dynamic new audience, Gen Z and millennials.
This has improved their digital services by focusing more on the “user experience” and the current technology used by this audience. The collaboration of FinTech and traditional financial services can increase revenues, generate new business and enhance the consumer experience. And it will also create new opportunities.
FinTech is a growing technology and has become a part of our daily lives. This digital era has enabled FinTech to achieve a whole new level of financing and changed the face of modern banking. It has already embarked its importance across all businesses around the globe.
Nikunj Gundaniya, Product manager Digipay.guru, one of the leading fintech solution providers, which provides mobile finance application development services. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.