The last 10 years have seen a breakthrough in the finance sector. Although the emergence of FinTechs dates to the early years of this century, their consolidation is much more recent. These companies, which create a powerful synergy between finance and technology, taking advantage of the advances and possibilities of the latter to improve and automate many processes of the former, have been very well received by a society that is increasingly less reticent about the digital environment.
A boom to be considered
The aim of these companies has not simply been to compete with other traditional companies in their field, now that the latter have completed their digitization process, but they have made innovation their spearhead to open new paths and connect much better with users. Transparency, agility, simplicity and personalization are some of its characteristics. Their activity has covered most of the areas of the sector, such as financing, mobile banking, crypto trading, financial advice and many others.
Managing one’s own money has become, together with new forms of payment, one of the main groups within FinTech and one of those that are getting more customers, attracted by the convenience and simplicity, as well as the innovative ideas it brings. In the UK, 84% of consumers now use FinTech, according to a recent study. These consumers say that FinTech is bringing them speed and better control over their finances. On the other hand, many FinTech customers also seem to perceive a more active role in FinTechs, as opposed to the passive role that traditional institutions often play. Precisely, a significant percentage of consumers expect these classic entities to take note or join these new companies, given that their service seems to connect better with them.
The digitization of these existing companies, such as banks, seems to not have brought all the solutions that users expected. Many, find Open Banking as a limited option versus a desired Open Finance that covers many more of the needs. To this end, FinTech has an important role to play, as it is their novel approach to environments that is connecting better with consumers. One of the challenges is unifying some of the services and adapting some of these start-ups to legislation. To learn more about their situation, it is interesting to visit some of the specialized portals, such as forex broker reviews, among others.
Today there are several more traditional entities that have focused on this FinTech phenomenon to try to incorporate some of their ideas or create various alliances. The goal is not only to improve their service and reach a wider audience (some of the areas, such as investments, now have new customers thanks to these new companies), but also to improve the perception that consumers have of them, since their transition to the digital environment has often failed to meet the expectations of users.
The future lies in continuing to innovate
It is more than possible that, in the short term, there will be some adjustments in the FinTech ecosystem, especially marked by some mergers and takeovers. Partly because services may become more global, partly because many need financial muscle and infrastructure to better position themselves in the market. But not everything is focused on adjustments. Several new companies will emerge with new ideas. The advance of technology will continue, but new possibilities will also appear to apply the current technology to offer products and services that are more adapted to modern reality, to the consumers desires and to provide new solutions that do not yet exist today. Some tools, such as Big Data, Augmented Reality or new environments, such as Meta, may also have a major impact on the sector in the very near future. For the time being, confidence in FinTech seems to be growing.