FinTech, or financial technology, has recently emerged as a new industry. The term, which has become saturated with new meaning, is often used to describe newly created technology and its applications in the field of finance. On the other hand, it is used to identify start-up financial firms in the industry.
In recent years, financial technology has gained more attention in the world with the most significant developments related to:
- Blockchain technology;
- Peer-to-peer (P2P) lending;
- Mobile payments.
Some studies have shown that global financial technology investment reached $ 19 billion in 2015, of which $ 13 billion came from venture capital firms. How will financial technologies and the financial industry develop in the future? Will they complement each other or will they be incompatible?
What level does Fintech hold for its users?
Compared to financial technology, the term Fintech has a broader meaning. Fintech is more about solution providers in the industry in django case, rather than just being limited to technology providers. For example, mobile payment is a popular feature on the Internet. Many fintech firms have developed hardware, software and online tools that are well received by consumers. Compared to traditional financial solutions, the products offered by Fintech firms have their own unique advantages. For example, PayPal does not require users to fill in their credit card information every time they make an online payment.
What role will Fintech play in the future of the financial industry?
Fintech firms are usually strong in technology and its applications, but they are largely inexperienced in the operations of the financial sector. Therefore, it is difficult for them to completely replace the traditional financial sector. There are three ways that Fintech can develop:
- The most ideal way of fintech software development for firms is cooperation with banks. While still focused on their own businesses, banks can embrace financial technology in procurement and paid services. However, examples of such successful situations are few, mainly due to corporate cultural differences. In addition, many mainstream banks are content with a rudimentary level of arrogance and are unwilling to admit failure in some areas. When Fintech enterprises set themselves the goal of disrupting the financial industry, there is a huge gap between the two sides in terms of expectations. In fact, each side is strong in its own way, and unification could be a long-term win-win strategy.
- Fintech businesses are making strides in technology segments – including mobile payments and P2P – when they offer financial services, while banks are not strong in these areas. These types of businesses provide more room for innovative ideas and technological skills, but they also reduce the profitability of production.
- Banks are developing such technologies on their own. Currently, many of the world’s leading financial institutions such as Goldman Sachs and Union Bancaire Privée are actively contributing to blockchain technology. This is the main threat to Fintech enterprises. So, banks can develop the business of mobile payments and their analogies on their own and without too much trouble. Fintech enterprises had the opportunity to capture these markets since banks are not very active in developing these types of businesses. Until the banks change their minds, this will have a huge impact on Fintech enterprises, giving them the opportunity to operate on a full scale and with all the necessary resources.
The post FinTech Development: The Future of Financial first appeared on Mind My Business.