Maturity Of Innovations Is The Primary Reason For The Growth Of Fintech
The most significant thing about fintech is that it is not just a buzzword. It is, in fact, the best innovations and technology put into the best practice within the intention to make several possibilities happen such as:
• Helping the financial services providers to function in a far better way
• Helping them to offer better financial products easily to the borrowers and ultimately
• Making the borrowing experience more memorable, accessible and convenient.
It is all due to the maturity of these innovations and the ways in which these are put to use. Over the years, there has been a significant rise in the number of fintech or financial technology companies so much so that experts and critics of the finance industry sector expect it to disrupt the normal functioning of the traditional banks and other financial institutions.
Reason for its rise in popularity
Valid concerns as it may be, there are several reasons for the stupendous rise in the number of fintech companies. It is seen in the report of Accenture that:
• The global investment in financial technology companies has literally tripled its previous amount of $40.5 billion in 2013 to reach a staggering $12.2 billion in 2014. Just imagine the figure of 2019!
• However, the report also suggested that amongst all other countries of the world, Europe is the fastest growing country in the world in the number of financial technology companies.
The report indicates that this number will continue to rise significantly in the years to come as well as supporting the evolution of financial technology companies.
However, when you look at these financial technology companies it is not just about providing financial services to the borrowers. It also involves all different business models that are followed by different types of machinery and arms in the financial services industry all over the world.
Consumer technology seems to have evolved and played the most significant role in every aspect of finance and money management including filing taxes, applying for a loan or even for paying the bills of a coffee shop.
Maturity of fintech innovation
When it comes to innovation of the financial technology companies and its maturity you will find several reports that will suggest a lot of implications and indications. According to the report it is found that:
• More than $28 billion has been already funded
• This investment is made into 3,609 rounds for Seed that are based in the US.
This is an old report that signifies the early and late stage since January 2008 related to financial technology company startups. In addition to this report, it is also seen that more than $7 billion out of this $28 billionhas been invested typically after January 2017.
The global investment figures
The extensive use of technology in financial services sector whether it is by the traditional banks or credit unions and even any other online money lending organizations of the like of libertylending.com may make you wonder who raised such enormous amount of money for them.
Well, the plain and simple answer to your question is the fintech startups. This includes different forms and shapes of it such as the tech companies that deal with products such as:
• Payments and transactions of money
• Management of personal finance
• Filing of taxes and its returns
• The insurance products
• Money lending and
• All credit categories.
As far as the global Investment in fintech is concerned, there is a constant increment noticed in the level and amount of investment into this fintech sector that offers a lot of promises and opportunities. This is however led by several arms of it that include:
• The venture capital
• The private equity and
• The Angel Investors.
It is for this reason that most of the financial technology startup company is trying their best and putting in every possible effort into their service to make it ideal and most successful.
Role of mobile banking
The rise of financial technology companies must also give credit to mobile banking that has a significant growth area. With the development of mobile banking and its dynamic solutions, the entire whole world seems to be moving towards easier and faster banking and payments.
• As a result, a lot of financial technology companies have also started to provide such dynamic solutions that are at par the category of mobile banking.
• Another significant factor is the earning and spending habits of the consumers that have undeniably changed the financial technology service providers’ operation, types of financial products and service.
It is believed that due to the mobile banking services there has been a lot of change in the earning and spending of the consumers. Another significant factor of the mobile banking services is that it is expected that there will be a lot of growth opportunities offered by the different mobile banking apps in the near as well as in the far future.
Take a look at the Berlin-based N26 financial technology company that has enabled their customers to manage their bank accounts using their smartphones. According to a recent report it is found that:
• The financial technology company, as a result, has raised $60 million in a round Series C through their China-based Ten cent Holdings as well as Allianz X.
• Founded in 2013 this company N26 has a total funding amount to $212.8 million. This helps them to meet the goal to resolve the inadequacies in banking all over Europe.
It is also found in the report that this feat is achieved by the company through different ways that include:
• Issuance of free MasterCard debit cards
• Free checking accounts and
• The mobile-centric user experience that is focused on the millennial.
In addition to that, the N26 has attained more than 850,000 customers and with such a growth it aims to reach 5 million app users by the end of the year 2020.
That means, to sum up, you can say that in general, the growth in financial technology services is making the entire process more transparent, faster, efficient and far too less costly.