Fintech has evolved and how over the last few years. The various financial technologies on offer and the growing number of companies and services that are now using innovative fintech apps and platforms to either help manage their own finances or provide a better quality of financial services to other businesses and individual consumers is seeing a shift.
Since the last few years, new developments in financial technology have changed how the financial services industry runs and supports its customers.
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Fintech has steadily evolved to become a part of our everyday life. Whether it’s shopping for groceries or buying a coffee at your nearest Starbucks, payment apps, digital banking apps and fintech in general has seeped into everything we do.
While payment platforms like PayPal have been around for a while, allowing users around the world to easily transfer funds to one another across borders, when you look at products like Venmo or even cryptocurrency – you’ll see how this segment is changing everything users do when it comes to payments and finance management.
I’m sure you don’t need a quick refresher on “What Is Fintech” at this juncture, but to cut it short- Fintech is used to describe the array of financial technology providers, basically an industry encompassing any kind of technology that enables better financial services – for businesses to even individual users. Fintech denotes a product or company that enables seamless and better financial services through the use of software or other technologies. Today’s fintech market offers a range of features and apps, from mobile payment apps to cryptocurrency.
Companies that make it feasible to use the internet, mobile devices, software technology or cloud services to perform financial services fall under the gamut of fintech.
Here’s a quick look at how fintech innovations are changing everyday life.
A change in how consumers access and manage their finances
Fintech innovations and the many payments apps that are now available have completely changed how users manage and access their finances. Mobile payments app like Square to other insurance and investing apps have overhauled how users approach their finance management tasks.
That does not mean that there is a threat to other banks and financial institutions. In the past, fintech primarily referred to the support of back end systems of banks, but new innovations and the choice that businesses and individual users have when it comes to trading, investing, getting an insurance policy has led the segment to spread its influence into more areas.
As of 2020, it is possible for users manage their funds, trade and even pay for food deliveries via their smartphones at a click.
Change in how businesses and users track finances
Managing payments on time and more conveniently is one good benefit of modern day fintech innovations. These apps and platforms have also made it easier for users to track their finances
According to a 2016 report most people already use between 1 to 3 apps to manage their finances.
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Lesser need to rely on Brick and Mortar
With the onset of the ongoing Covid-19 disease worldwide, there has been a big change in how people are running their business and how they are living their daily life. Fintech allows users especially at a time such as this to be able to facilitate their payments and manage their accounts and funds through their phone or any other portable device without the need to rely on brick and mortar services. Imagine – what if the Covid19 devastation had hit about 15 or 20 years ago: would it have been that easy to manage and track personal finances in the middle of lockdowns?
Growth in Crowdfunding platforms
Fintech brands/Crowdfunding platforms like Kickstarter, Patreon, GoFundMe are just some examples of how new innovations are changing the way people and businesses source funds. Gone are the days when one had to go to a bank or lending institute to get a loan. Up until a few years ago, that was the only option.
Crowdfunding platforms allow users to send or pitch for and receive money from others. Smaller tech startups can use to their advantage when they need investments for a specific task or project!
The rise in the number of crowdfunding platforms over the years only goes to show the growing popularity and convenience this niche offers.
The rise of blockchain and cryptocurrency
Emerging technologies such as these are allowing users to capitalize on what fintech can do for them in more ways than one. Cryptocurrency exchanges like Gemini, Coinbase and others help users to buy and sell cryptocurrencies like Litecoin, bitcoin.
In addition to this, blockchain innovations via services like BlockVerify have helped reduce fraud and protect the transactions of customers. While these new technologies and currencies are still evolving and the market is still not completely aware or confident about them, it’s easy to see how they’ve already started impacting fintech as a whole.
The Growth of Mobile payment apps
Everyone has used their smartphone to make at least one payment by now. It’s convenient, quick and easy. According to an earlier Statista data study, the mobile payment niche itself was set to cross $ 1 trillion in 2019 alone.
New innovations that allow for simple scan-and-pay features allow users to simply make a payment for any service without the need to manually feed in any details!
Rising Importance of InsurTech
New innovations in InsurTech has disrupted how users apply for, choose and manage their various insurances, from their car insurance to their home insurance. These new innovations have enough features in place to also secure a user’s personal data. The Insurtech market is growing in popularity as seen in the funding rounds that these companies have attracted. The ease of use that InsurTech offers makes it a lucrative market for investors and users.
Insurtech startups have attracted funding, with insurance startup Oscar Health securing $165 million in funding in March of last year – at a $3.2 billion valuation, according to CNBC. Then there was Credit Karma, a personal finance company that was valued at $ 4 billion in 2019.
The way people trade has also changed with time. Algorithm-based asset recommendations and portfolio management features have made it easier for users to trade online, from wherever they are. Advanced technologies help analyse various portfolio options thereby reducing the need to sit across the table and manually look for tips from brokers and investors.
This has also seeped into the way financial institutions recommend assets and trading options- with the use of robo-advising, even FI’s find it easier to counsel users and sell their products.
Gone are the days when investors had to physically go to a stock exchange like the NYSE or Nasdaq.
And given that many of these fintech apps like Robinhood or Acorns are easy to use and inexpensive, trading and budgeting has become far more easier.
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Personal finance apps and Budgeting Apps
It’s time to say goodbye to the days where users made use of complicated excel sheets to track and manage their expenses. Budgeting apps have grown in popularity over the years. The fintech revolution has led to the development of several financial services apps, allowing consumers to easily and efficiently keep track of their expenses, income and other finance needs, even investments in one place. This has led to a drastic change in how users think about their money matters!
Budgeting apps like INTU help users do everything in one place and device.
How has fintech seeped into your life? Care to share a thought or two?