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A beginners guide to FinTech


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Nowadays, digital is part of our DNA, part of how we share our experiences and how we consume and entertain ourselves.

No mystery that in 2019, we use a lot of apps that make our lives easier. Everything is digital, and we only need our smartphones to get access to everything.

According to the EY Global FinTech Index 2019 report, 64% of global consumers and 25% of global SME’s utilize applications from Fintech industry.

96% of global consumers know at least one alternative Fintech service available, and 3 out of 4 consumers have used money transferred and payment Fintech services.

After the internet revolution and mobile internet/smartphone revolution, the financial industry was the next convenient industry for digitalization. It happened at a faster pace after the 2009 economic shear when many banks were caught up in norms, procedures, or regulations to recover, thus leaving innovation behind.

Fintech appeared as a faster and more convenient way to satisfy the customer’s needs and expectations.

Market results?

According to KMPG Pulse of Fintech report, global investments in FinTech companies in 2018 hit $111.8 billion compared to 2017 when it was $50.8 billion. In Europe, the stakes in 2018 w$34.2 billion and 2017 were $12.2 billion. Most of the investments went to payments application (PayPal, Zelle, Venmo – US, Starling Bank, Monzo, Revolut – UK; Google Pay, Apple Pay, AliPay).

Top 3 European FinTech deals made in 2018 according to KMPG report, were: WorldPay (London UK; payments/transaction app; $12.9 billions), Nets (Denmark; payments/transaction app; $5.5 billions), iZettle (Stockholm; payments/transactions; $2.2 billions).

So FinTech delivered. And still growing and probably will till new services will merge with AI, Blockchain as part of our everyday life.

Still unclear with the new way of transactions?

FinTech is shorter for Financial technology, and it refers to the new and innovative way of how we do and how we deal with money and banking. FinTech is all about how technology firms redesign our banking experience using today’s technology. Some economists say that we live in a FinTech Revolution. They believe that FinTech is going to take over the financial industry. It is going to change the services that the banks as we know it today offer their financial services.

Fingerprints/facial recognition replaced the tokens used for approval of the transaction; exchanging money is now possible with reasonable rates, and money transfer is a matter of minutes. Peer-to-peer platforms allow us to lend money without going to a bank, and this is not all. The FinTech industry will continue to change our experiences with financial services.

But why is the FinTech Revolution so important? Because it increases competition, it offers excellent financial services to customers.

Does FinTech help in our business communities? Yes, I believe it does a lot.

In the financial industry, banks focus on norms and procedures, and this limits the possibility for a small company to get a loan, for example. But the need of the company doesn’t disappear. So the FinTech firms that operate in this industry can offer this service to better conditions than the banks.

Why do people start using the services and applications created by the FinTech start-ups/companies?

A possible answer may be because people realize that they can’t change the way banks offer their services. People intend to encourage FinTech firms to create competition. Or because it is cheaper and easier to use, faster to deliver results.

What’s next in the FinTech industry? It would be as simple as asking on our phones “Can I afford to go out tonight?”. Or “How much should I save per month to go to New York next year?”. Your bank account should be smart enough to answer these questions instantly and let you make quick decisions based on fast and reliable data.

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