It’s almost the end of 2019 and at this point, it would be safe to assume that you would have experienced the power of fintech at least once. If you’ve used a mobile wallet, internet banking, a UPI application or an online portal to buy credit cards or insurance policies, you’ve experienced fintech in action.
The combined force of finance and technology has been influencing the way things worked across several industries. If you didn’t know, the fintech industry is anticipated to be worth $26.5tn by the year 2022. Capitalizing on the booming market and the evolving technology, companies around the world are joining the fintech bandwagon.
The United States alone has over 5,700 fintech startups, followed by Europe, Africa and the Middle East with 3,583 startups and the Asia Pacific with 2,849 fintech startups. Fintech startups are rapidly becoming unicorns in Latin America.
But amidst all these numbers and statistics, fintech seems to be only popular in the B2B sector. Regular consumers like you and I are still unsure of what it is. Well, let’s get it cleared.
What are the FinTech Apps?
Fintech is anything that leverages the power of technology to offer better financial services to customers. This could be a credit-based loan disbursing company, an online insurance policy vendor, a marketplace or an aggregator for it, a UPI service provider or more. These businesses work with an infrastructure of highly encrypted networks for transaction security, machine learning, data science and other disruptive technologies to offer transparent, reliable and secure financial services.
Industries Influenced by Fintech
Retail is one of the industries that has been influenced massively by the fintech industry. The rise of mobile wallets and online payment systems has allowed companies to establish an omnichannel presence for their customers. With fintech today, customers can shop online or offline, from their smartphone or tablet, with their credit card or debit card, with their UPI app or their digital wallet or even pay later if they have a good credit score.
The On-demand Market
One of the other industries of recent origins, the on-demand market is one of the most flourishing sectors in the world today. The millennial ideology and complementing technology have paved the way for the on-demand market to offer a seamless experience to customers. Fintech industry has influenced this market by allowing real-time payments to vendors and marketplaces. Earlier, if it took up to 3 or 5 days for the payment to reach service providers, it happens in real-time today. On-demand services like cab and food delivery services are booming because of instant money transfer and invoice generation facilities.
Fintech is also offering new and unique opportunities in the healthcare sector. While online transactions are key here, fintech is also working on enabling companies to incorporate insurance and lending facilities as part of their healthcare ecosystem.
Successful Fintech Startups Who Are Helping Businesses
A fintech app, Revolut offers several features to its customers. The app allows you to open a bank account, exchange currency, free debit cards with international delivery, free international transactions in over 100 currencies and more.
Initially started as a platform for DTH and mobile recharge Paytm evolved to become one of the most popular fintech solutions in India. It’s also the only company to produce two decacorns (companies with an evaluation of over $10bn). Over the years, it has diversified into sectors like investments, eCommerce market, payments bank, payment gateway and more.
A payment gateway startup, PayU has enabled small and medium companies to adopt online payment systems for their businesses. The startup also offers an app that enables vendors and merchants to accept and process payments, assess the performance of their business, request payments, raise invoices and do more.
Insurance policies have always been bewildering. With a view to simplifying the processes involved, PolicyBazaar arrived as a marketplace to offer insurance policies and all information about it. On the website, customers can compare plans and products, read reviews, have a transparent view of the plans and understand better.
The Rise of Fintech
There are several reasons why fintech has been growing ever since its onset. The fintech industry has enabled:
- Companies to receive payments easily.
- Finance lending companies to assess risk better when lending loans to customers
- Customers to have clarity in selecting insurance and investment options
- Businesses to prefer alternate payment methods
- Market players to incorporate blockchain technology into their systems
This is only the start of the fintech era. With more technological advancements, government intervention and adoptions, we would soon see a world where industry 4.0 is thriving because of fintech, powered by artificial intelligence, blockchain, data science, and bots. Share on the comments on what you think!
About the Author:
Hardik Shah works as a Tech Consultant at Simform, a leading custom software development company. He leads large scale mobility programs covering platforms, solutions, governance, standardization, and best practices.