Fintech
The Future of FinTech and Its Impact on Business Banking
Fintech isometric composition with 3D text surrounded by payment icons and bank cash isolated with people vector illustration
Fintech is all about ease, access, convenience, transparency, convenience and customer experience. One way to achieve this is to make finance invisible by embedding it in everything we do. Embedded finance is very interesting in every other industry, especially in business banking.
It has become a bit of a buzzword in recent years, revolutionizing the way we interact with money and challenging traditional banking systems. In this post, we will take a deeper look at fintech in general and its impact on business banking.
How it all started
Let’s start with some interesting facts that might highlight the growth and impact that fintech has on the world. In 2020, global investments in fintech startups surpassed 105 billion dollarsMore than 100 of these companies have been valued at more than $1 billion.
The value of global mobile payment transactions is expected to exceed $4.7 trillion by 2025and is currently experiencing a growth rate of over 25% per year.
The COVID-19 pandemic has accelerated the adoption of digital banking. It is estimated that 76% of users in the Western world conduct their banking transactions through digital services compared to traditional banking services. The global peer-to-peer lending market is expected to reach 1163 billion in value by 2027.
The arrival of fintech has brought about a seismic shift in the traditional banking landscape, reshaping the financial landscape as a whole, making traditional banking redundant in some areas, or forcing traditional banking systems to adapt to these new methods. This has happened in several key ways.
4 Things FinTech Is Changing Business Banking
As much as you may not want to admit it, people hate banks. Do you remember the last time you went to your local bank branch? Seven out of ten millennials would rather go to the dentist than to their local bank.
When people are in control of their finances, they feel like they can achieve their goals. They feel more optimistic. We are happier when we know we can book a trip or afford the next big purchase. Banks need to support this positive mindset, which is what fintech has been doing for years.
1. It is revolutionizing the lending market.
Applying for a business loan is a prime example of how traditional banks were drowning in red tape. Fintech has demonstrated its potential to improve efficiency and reduce costs. You can now find a range of apps and websites that help you compare credit card loan prices in a way that banks refuse to.
For entrepreneurs, peer-to-peer (P2P) lending platforms also offer an alternative to traditional bank lending. These platforms connect individual investors with borrowers and can often offer lower interest rates and more flexible terms than banks.
2. They can improve your spending decisions.
If you are one of those entrepreneurs who find it difficult to make the right decisions when it comes to money, we have good news for you. Fintech might be the one to save the day. That’s because one area of fintech that is gaining a lot of adoption is financial apps.
With so many apps, you can use budgeting features to help you better manage and track your expenses. For business accounting services With small teams and little oversight of purchasing, this is very helpful. You can replace manual, error-prone tasks (like physically tracking receipts or manually entering credit card purchases) and avoid going over budget too easily.
3. Cross-border payments are now much faster.
Global money transfer services continue to evolve rapidly, and financial technology is playing a major role. Digital banking platforms are trying to obviate the need for traditional banks.
They allow you to make instant payments in real time to other countries for people who don’t have a bank account (imagine that kind of system 20 years ago!). Thanks to fintech companies like Genome, you can now quickly send money around the world without having to worry about fees or delays on international transfers.
4. Traditional banks are worried.
And for good reason, too. That’s because until a few years ago, banks had a firm grip on pretty much everything we did with money. Being the huge, bloated dinosaurs that banks are, there wasn’t exactly much incentive for them to innovate or compete.
Let’s jump forward a few years and make some leaps forward in digital technologyand it was time for the smaller, more agile players to step in. You guessed it: fintech. And for the past decade, they’ve been giving your favorite bank a run for their money.
Wrap
If there is one thing we can be sure of, it is that FinTech is here to stay. The convenience, accessibility, and cost efficiency that FinTech offers make it a game changer. And with the rapid pace of technology, we can only expect more innovation and disruption in the future.