In a short span of time, FinTech (Financial Technology) has already had a tremendously disruptive influence on the financial services industry. You can now manage your bank accounts, send money, and even apply for loans with nothing other than a smartphone.
Expect Increase in Services being Offered Using FinTech:
As the FinTech revolution continues, the range of services available to consumers will expand even further. In 2018, we’ll see the rise of…
A lot of obstacles stand in the way of anyone hoping to invest in the stock market. Commission fees, minimum account balances, and simple lack of knowledge have all prevented many would-be investors from trading stocks.
Apps like Matador are changing that. This product breaks down the barriers by allowing users to buy and sell stocks directly from their phones. Because the company doesn’t operate out of brick-and-mortar establishments like traditional brokerage firms, it doesn’t need to charge users a commission fee.
Of course, existing firms aren’t likely to let leaner competitors take their place so quickly. Many will probably strive to utilize native Android app development and other mobile strategies to hold on to current customers while continuing to attract new ones.
Banks and other financial institutions will need to collaborate with startups if they’re to survive the fintech revolution.
Luckily, doing so is good for everyone. Entrepreneurs in this industry often have smart ideas, but lack the expertise to successfully implement them. Bankers may be clinging to old ways of serving their customers, but they know how to navigate the regulations that often make it difficult to provide financial services.
Through collaboration, startups will help banks stay relevant, banks will help startups handle regulatory issues, and consumers will benefit from the best possible service.
Increased Blockchain Technology Applications
Despite being only about a decade old, blockchain technology has already demonstrated the potential to substantially improve the quality of certain essential financial services.
For example, blockchain technology allows banks to record transactions in real-time on digital ledgers that are accessible to anyone in the community. Processes like international wire transfers will be much more efficient when banks are able to quickly confirm where money is being sent from, and where it’s being sent to.
Even More Efficient Transactions
Reducing friction is a key goal many fintech companies share. A great example of this is Amazon Go. This brick-and-mortar experiment from the ecommerce giant lets customers walk into the shop, walking right out with any goods they wish to purchase. Meanwhile, all transactions are processed digitally.
While this is convenient, it’s also important to realize that some degree of friction may be desirable for customers. The easier it is to purchase items, the easier it is to overspend. Customers will have to adjust to new fintech trends in order to avoid falling into poor financial habits.
Expanded Lending Services
Online lending companies have an advantage that many banks don’t when evaluating whether or not an individual or company is a safe bet for a loan: access to online data that helps them better assess risk factors.
Thus, the popularity of these services has grown steadily during the fintech revolution. These aren’t all small businesses, either: Amazon’s lending department has already loaned its merchants over $1 billion.
It’s important to note that these online lending companies are often inclined to approve loans that traditional banks won’t. Having access to more data helps them make better-informed decisions. As more small businesses gain access to the necessary capital, the effects will be felt throughout the overall economy.
Whether you’re a consumer, banker, or entrepreneur, FinTech is set to change your life even more than it already has. 2018 may be the industry’s biggest year yet, showing just what these new innovations can truly do. It’s an exciting time for everyone.
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