- Home
- Company
Company
- Service
- Industries
- Solutions
- Insights
- Contact Us
FinTech is a buzzword that combines the words “financial” and “technology” and refers to innovative advancements in the delivery of financial services. It has disrupted the traditional ways of managing finances by offering faster and more convenient solutions for consumers and financial institutions alike.
For example, gone are the days of waiting in line at the bank to check your balance, as now you can access that information in real-time through your mobile device. From online banking to peer-to-peer payment apps and quick lending decisions, FinTech is revolutionizing the way we manage our finances.
Investors can also take advantage of FinTech, as they can research and choose stocks, monitor their portfolio performance, and make informed decisions in real-time. This newfound financial power is leading to increased financial literacy and better financial outcomes for consumers, thanks to the integration of technology in the financial sector. FinTech is breaking down barriers and empowering people to take control of their financial futures.
Some well-known companies such as Personal Capital, Lending Club, Kabbage, and Wealthfront are examples of fintech companies that have emerged in the past decade, providing new twists on financial concepts and allowing consumers to have more influence on their financial outcomes.
1
Fintech giant Kabbage directly funds small business loans and is powered by transactional data to make incredibly quick lending decisions. Tapping into peer-to-peer lending, Lending Club lets users loan each other money (P2P lending) for business ventures without the involvement of a traditional financial institution. Each of these innovations is made possible through the use of big data and advanced analytics across digital platforms. In the growing field of credit reporting, Credit Karma is an example of a FinTech that provides a service (free credit reports) in exchange for the ability to advertise loans and credit cards tailored to the specific needs of its customers.
2
With consumers looking more towards financial wellness, many financial institutions are adopting or expanding their mobile banking capabilities to meet the rising demand for digital banking among consumers. Most banks now offer some type of mobile banking capability on their platforms.
3
Ask any person under 30 how they prefer to pay, and they’ll likely tell you mobile apps are the way to go. As we’ve moved from a cash-based society to an increasingly digital one, peer-to-peer services such as Venmo have arisen to replace traditional payment methods. In fact, it’s estimated that in 2018 alone, mobile point-of-sale transactions will top $5.4 billion worldwide.
4
Cryptocurrency exchanges have been able to connect users who are buying or selling cryptocurrencies such as bitcoin. Blockchain solutions have aimed to reduce fraud by keeping provenance data on the blockchain.
5
Insurtech is the use of technology designed to maximize savings and gain efficiency from the insurance industry models. Insurtechs are redefining the insurance customer experience by innovating lengthy processes including underwriting, claims processing and immediate activation. FinTech companies are starting to partner with traditional insurance companies to automate processes and enable the insurance companies to expand coverage.
6
Trading and investing have improved with the adoption of FinTech. Information from big data is often unstructured and unreadable without the help of AI technologies. Using natural language processing, these technologies can sift through complex datasets and extract insights from them in a matter of seconds. Now, traders can run large amounts of data through algorithms and identify trends and risks.
7
Through Banking-as-a-Service, or white-label banking, FinTechs are able to offer a financial institution’s products and services under their own brand. The FinTech pays a fee to a financial institution to access their BaaS platform, banking license, regulatory expertise, and services associated with lending, payments, mobile bank accounts, debit cards, fraud management, and more.
8
The growth of FinTech is due in large part to the opportunity it affords small players to compete in the same field as traditional banks and financial institutions. Thanks to FinTech, it’s no longer about who is biggest, but who is fastest and most responsive at effectively addressing the ever-changing consumer demands. Additionally, the solutions offered by FinTech companies are no longer "one size fits all." Instead, they offer targeted, often niche, services that fill the gap of a particular financial need, sometimes at much lower costs than those offered by traditional financial providers. As consumers become even savvier and more connected, the FinTech companies that succeed will be the ones that continue to successfully innovate by bringing new solutions to old problems.
