Today, there are approximately two billion people globally who do not have legitimate access to banking services. For this to happen, there are quite a few causes. They may have bad credit because of disappointing financial choices in the past or they may not have built up enough traditional credit history. This is also possible if people live in an area where access to financial services and credit is restricted. This is where FinTech companies and investors come into the picture. They are trying to find an answer to this concern. Now, let us move on and learn what the different FinTech initiatives are that have been undertaken and to help the banking industry.
What are the different fintech initiatives?
The FinTech initiatives that are undertaken today have not only assisted incumbent financial institution,s but also addressed the trade gap with institutional funding and a redefined user experience with a variety of digital solutions. Now, let’s take a look at the different types of FinTech initiatives.
The DNI Initiative, or The Digital Negotiable Instruments Initiative, aims to fully digitize bills of exchange (B/E) and promissory notes (PN). In order to sufficiently achieve this, the combination of electronic signatures and advanced document technology helps to develop the appropriate contractual schemes. This solution is called an electronic payment undertaking (ePU).
The TFD Initiative, or The Trade Finance Distribution (TFD) Initiative, is an industry-grade initiative that constructs the blueprint for global trade financial distribution. ITFA is an example of a partner to this type of initiative. The TFD Initiative thrives on the insights of its members and is created to cater to their challenges and possibilities. Another fact about the TFD Initiative is that the membership in this initiative is open to banks as well as non-bank financial institutions.
Technology experts for regulatory actions
Trade finance distribution has faced a huge let down amid the COVID-19 pandemic. Today, banking sectors are adopting various new pieces of technology to digitize and automate trade origination and distribution. However, some innovations just can’t be widely adopted because of the given regulatory restrictions. Technology Experts for Regulatory Action, or TERA, has been set up to help the global membership in their regulatory advocacy efforts around trade digitization. The key focus of TERA includes the digitization of trade documents, bills of lading, and negotiable instruments.
How are fintech initiatives helping the banking industry?
FinTech, or Financial Technology, is assumed to be a modern movement and thus the implementation of the latest technology in the banking sector is a new phenomenon. Now, let’s dive in on how FinTech initiatives help the banking industry.
Latest, advanced technology has entered the field with full speed, and banking industries are utilizing them accordingly. Startups can run complex operations virtually with the help of technological advancements. Especially with the emergence of the coronavirus pandemic, banking sectors have focused on adopting more digitization than ever before.
Customers are demanding more and extra from their banking services, especially in the aftermath of the 2008 Financial Crisis and other various scandals. Technology directly certifies consumers to observe their providers more heavily and startups, unrestricted from the restraints of legacy technology, are utilizing it to deliver better and adequate customer service.
High regulatory oversight on banks post-2008 is calculated to cost the six biggest US institutions, which is around $70 billion per year. Aside from conceding with decrees, regulations on lending have both improved the borrowing expenses to clients and lessened the banks’ capability to propose it. This has authorized startups to get in and deliver compelling options.
Another great advantage that FinTech offers banking is that it enables seamless collaboration between various sectors and can produce good results in the choice of both parties.
The future of the banking industry will solely rely on technology and its advancements. Today, many banking sectors are trying to get their hands on the latest pieces of technology and services, such as mobile app development services and AI services, to render their clients the best experience they can offer. Welcome to the new era of banking standards.