11 Things About Fintech You Probably Didn’t Know
You don’t need a degree in Computer Science to figure out that fintech is an abbreviation for “Financial Technology”. Although, some people, especially those outside the technology sphere, may still need a little enlightenment. But, what comes after the meaning of the abbreviation, is definitely the definition.
What is fintech?
Fintech refers to the integration of technology that automates the delivery and use of financial services. It is built to help business owners, companies, consumers, etc. to better manage their payments and other financial activities.
Fintech is already changing the world of finance as we know it.
The world of finance is now really ripe for innovation. We cannot deny the fact that we are certainly living in the near peak of the digital world. Fintech is shaping the future as we know it. But still, we have many things yet to know more about it.
We have here 11 things about fintech that you may not know yet:
1. Fintech is a known competitor to traditional banks
The more fintech comes popping up on your news feed, TV, etc, the more the traditional, old-fashioned banks are sweating bullets. Why? because it means that fintech is giving them a real run for their money. They both have different sets of dynamics, it’s true: fintech operates 24/7, banks have working hours, banks are tangible, fintech is digital, and so on.
The point is, if we are looking at the time we are living in, people are in it more on the technology side rather than the traditional ones. Time changes and so do society’s preferences, and due to the colossal use of technology, fintech is becoming more and more known, and popular.
2. Fintech is much more than just a finance sector
Just because fintech is associated with the banking business, it doesn’t mean that they are only limited to what services the bank does. It is more than that. Why do you think many people choose fintech nowadays? It’s because of its versatility, like different payment methods, the way of remittances, in terms of saving you time, money, or gas for going to the bank, and many more.
3. Lots of people invest in fintech
Not surprising at all that many people are investing in fintech, because it is downright a promising business. There’s over $300 billion invested in fintech over the last decade, and according to Goldman Sachs, the market worth of all fintech firms globally is worth more than $4.7 trillion.
4. Helped millions of people get out of extreme poverty
Fintech is doing an amazing job of bringing financial services to the people who could not access them before, people who are the so-called, “unbanked”. Some of the unbanked are people with no stable income or permanent address, hence the struggle on accessing financial services. Financial technology solutions, allow them to build income/wealth, to escape the poverty line.
One example here is M-Pesa, which is a mobile-based money transfer service that literally means your smartphones can transform into a bank account. It was launched in 2007, and basically raised about 2% of Kenyans (around 200,000 households) out of the poverty line. It also reduced money/cash-related crimes in the country.
5. Revolutionizing the Loans Market
Another thing that fintech does, is that it makes the whole lending process more comfortable and seamless. Why is that? Because of the fact that we can explore or find a wide range of fintech apps and websites that will help us compare the prices of credits and loans, things that were impossible with traditional banking.
6. Cybersecurity is still a concern
This is already given in the nature of fintech. They hold enormous amounts of sensitive data, so there’s a high risk of theft. But with more innovation, as time goes by, it is likely to improve more in the future. Just always remember to be careful.
7. Can improve your financing/spending decisions
If you’re one of those people who have a hard time making decisions when it comes to money, fintech can certainly help you.
8. The biggest consumer of fintech is Asia
Not just in terms of the number of people using fintech, but also the percentage of the population.
9.…But United States of America is the biggest producer
Not surprisingly, Silicon Valley is the home of major technology, software, and internet companies.
10. Fintech’s work ethic is known to be more relaxed than in traditional banks.
Opposite to the traditional banking work ethic, which is seen as stuffy and kind of old-fashioned, fintech’s work environment is believed to be more relaxed and casual.
11. Big user of machine learning and artificial intelligence (AI)
Fintech uses cutting-edge technology to produce high-quality solutions. One of fintech’s famous uses of AI is in so-called Robo Advisors, which basically do the same job as financial advisors, only at a lower cost.
References:
“15 Things You Didn’t Know about the Fintech Industry.” Alux.com, 7 Oct. 2020, https://www.alux.com/fintech-industry/.
Kovacevic, Marko. “8 Things You Didn’t Know about Fintech.” Wolf & Wolf Technologies, 30 Nov. 2020, https://wolf-wolf.net/blog/8-things-you-didnt-know-about-fintech/.
