FinTech in the quest to overthrow traditional financial institutions: Financial technology or FinTech are those digital technologies that improve and optimize financial services and banking. With the new emergence of blockchain and artificial intelligence technologies, the financial industry is in for change.
Financial industries like online digital payments, credit or debit card payments, personal loans, and asset management have changed.
FinTech has provided consumers with a viable alternative to traditional banking services in the last few years. This has led the banks to realize the importance of FinTech as it has been disrupting the market. With a vast global population, instead of digitalizing almost everything, they expect financial services to be provided digitally. This is why there have been many latest modules and collaborations between established financial institutions and FinTech companies.
Almost 90% of financial institutions have increased their efforts to innovate digitally, as nearly 50% of people exclusively used digital channels.
96% of global consumers know at least one fintech service or company.
The history of FinTech dates to 1866, the first transatlantic cables provided for basic infrastructure. That bought about financial globalization. FinTech has a unique model of utilizing artificial agency and predictive analysis tools, which helps them analyze trends and prevent fraud. It analyzes vast amounts of data every minute to create insights and forecasts. PayPal is one of the most famous internationally used digital payment platforms and was the world’s first FinTech company.
It has over 205 million individual users and 16 million business accounts globally. It is also linked to many websites and used as a payment method.
FinTech has been creating to challenge and create a threat environment for traditional financial institutions. The most commonly used financial technology used today is the small EMIs. That e-commerce platforms allow their users to invest in. Bajaj Finserv is a leading company that provides competitive rates on Amazon India. Windeck has also seen innovating in providing mortgage microfinance to individuals who cannot afford credit.
FinTech is usually making its headlines with cryptocurrency used in its development. But its market share primarily lies in the traditional international banking industry, which has a multi-million trillion-dollar capitalization.
Even though FinTech is one of the fastest-growing industries today, it also has challenges. Regulation is one such factor, and it is heavily regulated in most countries. But sometimes, due to the increased implementation of technology. It becomes difficult to relate to them. This has made these companies more vulnerable to hackers. So it is safe to assume that. Such FinTechs are far from overthrowing traditional financial institutions. It has a long way to go.
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