FinTech, the New Darling of Business
Financial technology, lovingly called FinTech by many in the industry, has a very broad definition. Forbes puts it as the digital trend that makes use of technology in different financial service applications including those in the financial industry, mobile payments, money transfers, loans, fundraising, asset management and other business operations that can be considered under finance. It reimagines how financial services can be delivered and enhances consumer experiences with financial services and transactions.
In recent times, FinTech has become the fastest-growing segment among startups because it goes beyond helping big businesses. FinTech has enabled the easier founding of startups, running a business, and even going global. It is a sector where constant innovation is happening and is being encouraged because of the burden it lifts off of companies and their clients. Customer service in both big banks and SMEs have improved with an expected 90 percent growth with the use of FinTech. The technology also enables companies in different sectors to have a win-win partnership from startup product development and design to the infrastructure and distribution capabilities of banks.
FinTech in Action
Technologies like MineralTree have made it possible for financial service teams to become more effective internally and externally and have enabled the growth of companies like Attivio which were able to streamline their payment system, make it more efficient and centralized, and earn rebates from their vendors. FinTech helps the company consolidate all of its payables, and instead of paying for a full team to process accounts payables, one intern was able to do the job of a whole team full-time, two days a week.
More importantly FinTech’s impact on the global economy has caused more than a ripple in a pond. Long established traditional banking models are now being challenged. Because of the flexibility that the technology brings, banks found that smaller FinTech companies have been taking their customers away from them, which is why they have been integrating the technology and collaborating with FinTech companies to create better user experiences and survive in a rapidly innovating sector. Realizing the value of FinTech, Citigroup spent $8 billion in developing their own financial technology, which is about 20 ercent of the bank’s expenses.
As an enabler, FinTech has enabled even the smallest businesses and startups to thrive. Many small businesses are now using crowdfunding, e-wallets, and mobile payments, to name a few, to help their businesses reach out to their customers and create value. Easily integrated with e-commerce (usually SMB’s usual recourse to cut costs while still reaching their customers) small businesses are able to find a better platform to compete against the big companies without spending the same budgets they do. And with the “incorruptibility” of blockchain, trust is gaining ground for FinTech solutions that work with this technology.
Adopting to Adapt
The continuous innovation in the technology sector is paving the way for FinTech to be more widely adopted in businesses. Businesses small and large are constantly looking for ways to make customer experiences easier and their business processes more efficient. Making use of FinTech is the best way to create value in a competitive business environment.