Fintech is now best known for its cutting-edge technology of artificial intelligence and blockchain. While it simplifies our lives, it also helps companies to improve and automate their processes. Special algorithms and unique software are used on millions of apps today, which complete the “financial technology” world.
In other words, Fintech is the application technology that has become a threat to Wallstreet. That’s why startups have shown the potencial to revolutionize financial services. So, what’s the secret behind this powerful industry? Let’s find out the main reasons why Fintech is so important.
Fintech Creates Economic Growth & Inclusion
The Fintech sector creates new opportunities for businesses to branch out and provide new, cost-effective, automated solutions. The pandemic boosted Fintech firms at a tremendous rate. A recent report shows that countries that have a higher digital financial inclusion rate are associated with higher annual GDP growth rates.
Since Fintech can be easily used by anyone, it’s become accessible to those who haven’t taken advantage of such financial services before. People around the world have the opportunity to manage their funds easier, including such content as Africa. Some global Fintech firms provided access to mobile banking or electronic wallets that help lift struggling people out of poverty and develop a financially inclusive society.
It’s a Cost-Effective Alternative
If we compare Fintech with traditional banking, very often, Fintech companies provide the same high-quality services for a lower price. Since there aren’t any physical branches, some banks help keep more money in your pocket by not charging for a bank account. There are also stock trading apps without any commission. Also, by maximizing technology and its opportunities, Fintech companies automate many tasks. This way, they save money on employing people to do the work.
Once these transactional costs are pushed down, there’s a higher chance to attract unbanked customers that prefer to rely entirely on digital alternatives. Digital banking solutions are user-friendly due to multiple currencies and low conversion fees, and the fact that you can have multiple bank accounts in one app. Digital payments showed how easy it is to shop online or
how effortless it is to transfer money from one bank to another.
Fintech Ensures Transparency & Compliance
Traditional banks are slow when it comes to adopting effective, automated security measures. To help prevent fraud and mitigate the risk, financial institutions need to comply with Anti-Money Laundering (AML) laws which serve a critical role in the Know Your Customer (KYC) procedure. A successful KYC process involves identifying the true identity of the customer as well as the risks they might pose.
Since the whole foundation of Fintech is based on automatization, artificial intelligence, and technology in general, such innovative companies naturally choose digital solutions. For instance, to solve compliance issues and ensure that only valid, real customers are registered to the online banking services, businesses need to implement identity verification that is fully automated. Only speedy, real-time, user-friendly, secure authentication and documentation checks provide the needed perks that today’s technology-driven customers expect.
Fintech Improves & Empowers businesses
The most successful Fintech companies learned new ways how to amplify the benefits of existing technology. While it’s relatively easy to integrate technology into your business practices, it’s much harder to find a bigger purpose behind it. That leads us to the idea that specific technologies are less important than how you use them.
It’s a known fact that Fintech helps to simplify many processes and teach customers how to manage their funds easier. A good example of an empowering purpose behind Fintech is apps providing information regarding finance. Not only are they building the future of finance, but also improving people’s financial literacy. This way, thanks to Fintech and its enhanced financial capabilities, many learn more about the value of money and how to budget or save funds for future investments.
It’s Shaping Today’s Financial Industry
Fintech is the new norm. To survive major competition, businesses need to perfect their security systems and prioritize upgrading payment systems. You can say that Fintech has made a huge impact on how we store data and consume our finances.
To survive the competition and live up to the customers’ rising expectations, fintech software is a must. Otherwise, you might be losing your regular buyers due to inefficient operations. For example, most typical consumers expect to have swift and smooth money transfers. Many want to know how much they’ve made from crypto or stocks in the last 24 hours. Of course, the list goes on.
Fintech plays an important part in today’s digital sphere. With Fintech startups spreading like wildfire, you can brace yourself – the industry is just getting started. Companies can now expand their services and operate at a much higher efficiency. If you’re a business owner, now’s the perfect time to think about turning Fintech; into a safer, user-friendly industry with great perspectives.