Future Trends of the Fintech industry that will revolutionize the world
The FinTech startups are currently presenting financial companies with innovative business models and technologies. In the current competitive business strategies, the startups from the financial sector are focusing on competitive technologies such as retail banking and payment technology. Though these technologies are competitive, there is always a potential for technology innovation.
To encourage innovation, many industries such as healthcare and life science have started using the latest technologies for optimizing their business processes, cost cutting, and so on. Since there are lots of opportunities among various industries, the Fintech industries will get cost-effective processes and fewer regulations in the traditional financial sectors.
Each year, the economic crisis is continuing to be an unpredictable situation, and financial industries are facing various challenges. Some of the common problems are the rapid rise in asset prices, low-interest rates for a long period, huge savings and credit imbalances, and so on. The reports from the World Economic Forum have already predicted that the mentioned challenges are going to continue as a risk in the market.
The above diagram from the World Economic Forum’s report on disruption of the financial industry describes how “The coming collision between financial institutions and large techs leads to tough choices for all firms: become dependent on large techs or risk falling behind”.
In the earlier decades, the exceptional growth and the capitalism to its best have now created the market to adapt to tighter credit, slow pace of globalization, government intervention, and no growth in the economy. Lack of credit availability and change in regulations have resulted in financial industries facing risks in business growth.
At present, most ATM’s across the nation charge a fee for using them. It is better to be aware of your bank charges before you start using them. Also many banks offer us a maximum of six times to use the ATM’s free of charge on a monthly cycle. Apparently ATM’s provide services like withdrawals, transfer of funds, bill payments, recharging mobile and cheque as well as cash deposits and these services should be carried only in your bank tellers, as tellers of other banks charge a fee for processing each transaction.
The services offered by the ATM’s are plentiful. We need to manage our free transactions in such a way that we reap maximum benefits out of it.
The following are the unique trends that enable the future growth of the financial industries:
- Globalization in banking — Many banks such as Citibank, JPMorgan, American Express operate in multiple regions. Some factors for banks being an important reason for the financial sectors are improved finance supply, credit to small industries, and reduced interest rates. To achieve a consistent growth with banking relationships, the financial industries will have to provide and get access to the emerging markets as well.
Even today, few regions in Africa and Asia, the market growth opportunities for profit and market share price are not in parallel. This could be one of the major reasons for companies with an aggressive growth strategy are not operational in these regions. The market share and profit not being in parallel do not mean that these companies cannot be successful in these areas. Global banking is recommended to achieve significant growth in the financial companies.
- E-Banking — As per a recent report, there are around 4 billion cell phone users in the world. Out of these 4 billion, almost 90% of them are using smartphones. It is also expected that there will be around 10-20% growth each year in smartphone usage. Considering the latest technology and the features in these smartphones, all banking sectors have now started their own mobile application (app), and banking transactions have become easier through E-banking. The same report also indicated that people prefer to use e-banking/online banking to do banking transactions. Thus, E-banking capability is quick and is also becoming a mandatory requirement to be successful from the competitors.
- Mobile Money — Unlike E-banking, there are other platforms where customers can pay or get paid. This low-cost initiative has become famous across the world, enabling the customers to accept money, send money, and transfer the money to the bank. For example, one of the leading mobile operators, Vodafone has introduced its M-Pesa mobile-based money transfer technology in India.
One of the primary reasons that Mobile Money has become so famous is because people do not have to worry about internet banking, credit cards, password, PIN, and so on. Similarly, financial industries such as life insurance and general insurance can also follow this initiative to attract the customers, for new policy and renewing the policies.
- Networking / Collaborating — For future success in any business, instant access to information, product integration, and geography are the mandatory requirements. Financial industries need to compromise or need to be ready to reduce the price, based on the demand and supply of the global market.
One of the cost-effective initiatives is that the telecom operators of one country have tie-ups or collaborations with another company, where there is no service. Instead of starting a new service, with collaboration the cost of mobile service is greatly reduced. In this way, financial industries can start with collaboration for easy access to many destinations with lower cost. This method would be helpful for the growing industries trying to expand their services to many destinations.
- Self-Service — According to IBM, when it comes to the financial services, the self service for the customer should be the primary focus. There are various self-service portals that enable the customers to get instant access to various services and to check the status of their account online.
Many service providers have also automated to connect to the customer service representatives instantly for support. Unlike waiting and selecting various options from the phone, a one-click button enables the customers to get in touch with customer service representatives instantly. This type of service in the financial industries would definitely help the customers for building a good relationship.
Also, many western banks have introduced chat bots to cater to their millennial customers needs quickly as they would prefer. With chatbots every person can have his own Financial Butler to do financial tasks that the master would like.
In conclusion, Fintech companies continue to keep growing and increasing their business in our highly modernizing world. We see China leading the Fintech revolution with Alipay and WeChat pay dominating the way people pay for products. Such thinking in people is lacking in many countries around the world, and we hope they catch up to the Fintech revolution soon.