Smart technology has evolved at a rapid pace. In the beginning, smart tech reached consumers in the form of smart household appliances like thermostats, security systems and refrigerators. Now that same smart technology is helping Fintech companies become successful.
Fintech has disrupted the traditional financial system
Fintech has disrupted the financial industry. For instance, not that long ago, everyone had to go to the bank or an ATM to withdraw cash if they wanted to pay for goods and services. Most businesses accepted personal checks, but many people still preferred having some cash on hand.
Prior to the ATM, the only way to get cash was to go to the bank and/or write a check at the grocery store for more than your total and get cash back. ATMs made life easier, but they aren’t that convenient; you still have to drive to the ATM, which is usually attached to your bank.
Fintech isn’t just making life a little easier – it’s transforming the entire concept of financial convenience, beginning with streamlining processes for financial organizations.
Fintech leverages the power of the IoT connected world
Fintech utilizes the internet, software, cloud technology, and even smart technology to improve financial services. For example, when PayPal hit the scene in 2000, people could transfer money quickly and easily online.
For instance, Australian fintech company Firstmac has been leveraging smart technology to stay ahead of the banks. So far, its strategic use of smart tech has worked well. The company has provided billions of dollars in competitive home loans to Australian citizens fully funded by residential mortgage-backed securities (RMBS). Thanks to smart tech, Fintech companies like Firstmac can provide many of the same services as banks at better interest rates. That’s where most of the disruption is hitting – fintech companies are giving traditional banks a run for their money.
Fintech is transforming the global economy
While many popular fintech companies are based in the United States, the majority of large fintech firms are based in Asia. As a result, the Asia-Pacific region is experiencing massive growth in the fintech sector – perhaps even faster than the United States.
Consumer adoption of fintech services is higher in India and China than anywhere else in the world. According to Ernst & Young survey data published by Industry Wired, four out of five survey respondents in China have used at least one fintech service to transfer money via mobile device. More than 50% of respondents reported using fintech services for saving and investing. In India, 47% reported using fintech insurance services.
What kind of fintech is changing the world?
There are various forms of Fintech transforming the world’s financial sector.
- Blockchain. Most people know about blockchain because of Bitcoin and other crypto currencies. Blockchain technology provides a safe and secure platform for transactions that can’t be altered. This allows financial companies to provide seamless and secure experiences to customers and clients.
- IoT (connected devices). For example, wearable technology connected to the internet can make payments fast and easy for customers. If a merchant has the right equipment, a customer can simply scan a barcode on a smart watch or smartphone to make a payment. Smart IoT devices can also be used to unlock the outer doors to ATM machines at a bank offering after-hour access. This technology can replace the need for electronic key cards and physical keys.
- Augmented reality. Augmented reality (AR) is pretty interesting in the financial sector. This technology helps financial service providers meet common challenges. For example, AR can automate the process of mortgage calculations and provide outstanding customer service.
Fintech isn’t done disrupting
With all the advances in smart technology, we haven’t seen anything yet. Fintech is being adopted at a fast rate all across the world, and it’s only a matter of time before the next major disruption.
Many financial experts predict the next major disruption will be for banks to begin issuing their own form of digital currency that is accepted worldwide. This could very well lead to a one-world currency that makes exchange rates obsolete.
Fintech is already a profitable investment
Perhaps the greatest sign that fintech is going to continue disrupting the financial system is the profitability of fintech stocks. Fintech investments can be volatile, but the trend continues upward.
Based on the upward trend, financial companies that don’t get onboard with fintech will certainly be left behind.
