The FinTech industry has expanded and improved its offerings all over the globe, causing significant changes in the financial services sector. FinTech is not just a new concept for the banking industry, but it has become a common term in technology. Jorge Zuñiga Blanco, a specialist on FinTech, discusses how this new era impacts global banking in different ways.
Global FinTech startup investments have increased by more than 50% to $112 billion over the past 12 months. This is an increase of $51 billion from the previous year. This is more proof than any that the digital revolution has arrived in the financial sector.
The revolution being brought about by FinTech startups and FinTech banking is having a significant impact on all financial institutions worldwide. If banks know how to create strategic partnerships with FinTech startups who have the promise to disrupt the financial industry, they can play a greater role in the innovation ecosystem.
Zuñiga explains, “FinTech banks and FinTech startups have a huge advantage in that they offer fee-free loans. Traditional banks today face a significant competitor. They have increased their efforts to offer the option of personal loans online with almost no paperwork. They are trying to compete against FinTechs.”
FinTech companies are driving market changes by focusing their attention on new technologies that will offer a completely new experience for customers. The market will adapt as existing players focus on these technologies. They can then move closer to FinTech and use the technologies to adapt quickly to the changing FinTech ecosystem. This will ultimately improve the user experience.
It is important that you highlight some of the business pillars, such as wealth and asset management. This business area is home to banks and companies that offer advice to help people manage their wealth to meet a variety of objectives such as tax reduction, asset transfer, investment-based growth, and asset transfer.
Insurance is another option. Insurance companies are trying to keep up with the changes in the market and close the gap with other financial industries have increased their efforts. Insurtech is rapidly becoming an industry, but it still falls under the FinTech sector.
Zuñiga explains that although insurance is slow to adopt new technologies, many FinTech startups are working with traditional insurers to automate processes and increase their services. The industry is embracing innovation, from mobile car insurance to wearables and health insurance.
The market will respond to the growing complexity of data and models that help to quantify and identify risk is also a key trend. Insurers are now embracing data analytics innovation and plan to invest in it over the next few years.
There are also transactions and payments. Simon says that he has all the tools available to balance inquiries, pay and transfer funds over the Internet without the need to visit the branch.
While there are many banks that offer this option, FinTech startups have the greatest potential to innovate in this area. It is now easier than ever to send money digitally anywhere in the world. The most well-known payment companies include Square, PayPal and Stripe.
The FinTech boom has been closely followed by payment companies. They are now investing in technology such as data analytics and mobile that reflect the most relevant trends in their industry. The majority of payment companies have adopted blockchain technology into their systems and are investing in it.