The Rise of Fintech: And What's Coming Next
- Written by TechXO Team
- Category: Fintech
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Over the last five years, the world of finance technology has made an impact and established itself as a fundamental part of the global financial services network. Fintech startups are able to raise billions of dollars annually and still continues to raise money. Thereby disrupting and pushing traditional financial institutions like banks to get in on the action. Big bank players all over the world are now adopting the use of Fintech to remain competitive in a rapidly evolving financial services landscape.
Consumers are now becoming more accepting of technology as part of their daily finance needs. This is a factor that has led the traditional institutions to be on par with the financial services sector and leveled the playing field. Startups led a monumental shift in the way clients are managing their money. PwC’s Global Fintech Survey 2017 found that 84% of banks and other traditional financial services providers believed that clients were already making payments with Fintech companies while 68% thought customers were conducting fund transfers. Further, results from the survey revealed that 60% of the incumbent institutions said that clients were using Fintech for their personal finances.
This is the reason why most experts say Fintech is disruptive. However, the potential of Fintech is boundless. The future of Fintech will be much less disruptive if partnered with big traditional institutions making it much more collaborative. It is also perceived that emerging technologies and practices will improve financial services for consumers and businesses alike. Below, is a list of developments that will shape the future of finance technology.
More collaboration between traditional financial services and Fintech
Fintechs were once seen as startups only. Now, Fintech companies are being viewed as potential and valuable partners by traditional financial institutions. Both sides from each other in this possible partnership. Fintech companies need capital and access to a customer base meanwhile banks need to embrace technology and new approaches to be able to deliver quality service continuously.
Recent successful collaborations across the sector have already been observed. Steve Davies, a partner at PwC, told Raconteur recently in an interview that “every bank in Europe” is now adopting Fintechs. Further, he said the banks hope to benefit from Fintech startups, as well as proactively in the search for new innovations elsewhere. It is apparent that both sides have good things to offer each other. As credibility continues to grow between the two industries, it is expected to see more collaborations to thrive in the coming years.
Fintech as part of financial services
As the division between the two finance provider blurs, Fintech can now be increasingly viewed by the clients all over the world as just financial services, without the “tech” moniker. With the entirety of the financial sector embracing technology and moving towards the same direction, it is expected that Fintech will be seen less and less as standing apart.
The emergence of new technology
Fintech is the most used buzzword in the startup market all over the world now. With the competition evolving, startups have come up to harness technology to its growth. The concepts of cryptocurrency, newer lending models, biometric payment and robo-advisors are slowly emerging in the finance sector.
Better connectivity towards longevity
The Fintech sector is going forward steadily. For a company to be successful, it needs to be incredibly flexible and highly adaptable to survive. This is basically how Fintech startups are doing. Fintech companies are willing to embrace a more connected way of doing business. This will give these companies high chances of being around for the next ten years and beyond, attaining better connectivity towards longevity.