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Fintech or Financial Technology has become something we all are familiar with it. It has become a popular industry used by millions. Today ‘quick and easy’ services are in demand. Fintech market understands what today’s society wants and that’s why it has grown so successful.
Approximately 1.7 billion1 people worldwide don’t have a bank account. This plays in favour to Fintech as it offers people access to their finances through the use of technology. It is simple to set up and it can be done from anywhere in the world at any time.
The Growth of Fintech
After the 2008 financial crisis, fintech industries focusing on payments attracted a lot of investments, to be exact 70% of all fintech investments2. In 2014 fintech reached $6.8 billion in global investment and then $49.7 billion in 2015. With these statistics it becomes apparent that fintech is thriving. Global fintech investment already hit $98 billion3 in the first six months of 2021! Naturally, some of these digits have to be credited to Covid-19 as it accelerated the rise of technology and digitalization.
Fintastic World of Fintech
What makes fintech so fantastic and successful is obviously how easy it makes our lives. Fintech also has a lot of areas and sectors. This diversity makes the sector very attractive. The five major areas are “finance and investment, operations and risk management, payments and infrastructure, data security and monetization, and customer service”. Fintech has services that are complimentary to banks, but it also has services that replace banks. Fintech celebrates innovation and it has also established trust with its customers, something that banks still need to work on after the numerous recessions.
Fintech has a lot of advantages. It is low-cost, has no geographical limitations, is accessible 24/7 and has a relatively low risk.
Most of us engage in fintech through E-wallets and mobile banking. Apple Pay, PayPal, Adyen are all gaining immense popularity. Everyone has phones these days, so it makes sense. You can perform multiple banking functions over the phone now, instead of going to a bank like in the old age. Banks are trying to play catch up and most of them have mobile banking apps now too.
Biggest Bank Challenger – Revolut
Revolut has more than 2 million customers, whom completed 150 million transactions in a total value of over $15 billion4.
Revolut has also saved customers $560 million in fees – a revolutionary feat.
There are many things that makes Revolut superior to banks and that will in a few decades time bleed the banks dry.
- With Revolut you can avoid poor exchange rates when spending money abroad.
- It can also be 10 times cheaper to transfer money internationally, as Revolut can hold up to 24 currencies in your account.
- You can purchase Cryptocurrencies on Revolut.
- It is also great for savings, by rounding all your expenditure to whole numbers and putting the left over cents into a savings account or a vault.
- You can also donate to charities using Revolute!
The list of Revolut pros goes on and on. Revoult has not only become an alternative to banks, but it has also added revolutionary and exceptionally innovative services. It recognises that not everyone has a permanent residency and if you are involved in a lot of travel, Revolut will save you a lot of money!
Although banks have improved over the years in becoming more digital, they are still falling behind and becoming outdated. With cash also becoming a thing of the past, parents have turned to Revolut in order to provide their children with money. Why bother walking to an ATM and wasting money on fees? It has never been so easy to split restaurant or domestic bills. Fintech is revolutionising finance as we know it!
Financial Inclusion = Better Economy
Fintech has already influenced one economy. Kenya is a country where people are heavily unbanked. E-payment system M-Pesa has allowed Kenyans to have access to their finances. With 6% of Americans being fully unbanked and most being underserved we will see a lot of fintech economy disruptions.
Newspapers used to be a big thing in the 90s, but with the rise of technology and digital articles, came the downfall of newspapers. Is the same thing happening again with banks and fintech? Probably. Everything digital has a huge advantage today.
Fintech is contributing to digital revolution and promoting financial inclusion. If fintech succeeds “it would more efficiently channel savings into investment in industry, infrastructure, human capital – the very sorts of capital that would raise growth in emerging economies”5.
- What is FinTech and how it has impacted banking? (digipay.guru)
- Banking and Fintech a Challenge or Opportunity – PDFCOFFEE.COM
- 6 charts on deals and investments in the global fintech market (asianpolyglotview.com)