Is Your Business Ready For Fintech?
FinTech is a new term to describe an emerging business sector that uses finance and technology to disrupt companies in the financial markets. It is creating opportunities for start-up companies to compete with traditional firms in the insurance, banking and financial sectors.
It’s a new world
FinTech products range from the use of smartphones and banking apps to financial services and payment platforms to the Blockchain peer-to-peer decentralised ledger technology that underlies crypto-currencies such as Bitcoin.
There is a myriad of online tools and apps with the ability to disrupt existing financial models in banking, investment, accountancy and insurance. There are also the stirrings of interest from financial authorities, which is evidence of the importance of the newly created and fast growing sector.
FinTech started in the last decade to coincide with the financial crash as a way to merge finance and technology and offer more innovative approaches to finance and banking. It also provides an effective way to manage greater levels of regulation and scrutiny in the aftermath of the financial crash.
It was developed in the belief that existing companies were not providing customers with what they wanted and that there was an appetite for simpler technological solutions. The sector is attracting some of the best talent in the world and likely to keep expanding as significant hubs are appearing in locations around the world with London, California and New York as the early movers.
An entrepreneurial mindset
FinTech firms are increasingly using an entrepreneurial mindset coupled with the know-how of technology to create new opportunities in traditional areas of businesses. They are working with and out performing existing businesses to develop more tailored services for an increasingly dynamic and digital economy.
Large traditional financial organisations that provide security in different industry sectors may always play a role in the market but there is a pressing need for them to reduce overheads and downsize. Working with FinTech companies allows them to do so, as it brings innovation to staid and moribund practices.
The boom in the sector coincides with an increase in the number of people working for themselves and working in more flexible and remote ways for employers. In each case it is releasing the creativity of individuals as a way to introduce new products and services for digitally savvy customers.
Brexit is also driving the growth of the sector as companies experience greater insecurity and concern about the future, which leads them to look for cheaper solutions in all parts of their operations. The biggest challenge to the emerging industry however comes from the need for regulators to control what is happening and from data security breaches as they happen with greater frequency.
So, FinTech is moving from the fringes of the economy to centre stage as it attracts the best talent and grows to disrupt industry after industry.
