Ferhan Patel – Know the Benefits of Fintech for Consumers in 2020
Fintech… what is it? How is it evolving? Why has it revolutionized trading and all sectors of finance? The term “fintech”, a contraction of “finance” and “technology”, was launched years ago in the trade press, before spreading outside the pure sphere of finance. But what does it mean exactly? Here, Ferhan Patel will tell you more about it.
Why suddenly bankers, entrepreneurs, economists, analysts and traders appropriated this term? Explanations.
What is Fintech?
Fintech is a neologism that refers to financial technologies, like Biotech, in the health field. The term designates start-ups in the field of financial services (banks, insurance, investments, crowdfunding, online payment services, etc.).
But it seems that the term is not yet entirely familiar to Canadian people, according to Canada which estimates that only 4% of them know what it comes out exactly! Anyway, Fintech has become essential, especially in the BtoC (Business to Customer) sector. Fintech start-ups have invaded finance. Much more than a fashion phenomenon, it is a digital revolution initiated in a very specialized professional sector which today affects all individuals.
The evolution of Fintech
The term Fintech is believed to have appeared for the first time around the years 1980-1990. At the time, it was a background technology for traditional financial institutions. That said, Fintech has since grown into a rapidly growing range of consumer-focused services. The consumer is the big winner in the Fintech revolution.
In 2020, Fintechs include any form of technological innovation, including automation of the financial sector. This includes everything: information, advice, and education to improve the financial management of consumers for example, but also services that simplify payments and money transfers, what is called “Paytech”, retail banking, loans and borrowings, financial asset management, fundraising, etc.
Fintech gave a real kick to the ambient conservatism of the financial circles. Far from opposing traditional banks, Fintech companies are trying to coexist in harmony with the big heavyweights of the finance sector in the service of a goal that brings them together: the client. Clearly, Fintech services, positioned in sectors that simplify everyday life, have been widely adopted by the general public. It is indeed easier to verify your accounts online, rather than doing it in a bank branch or even by phone as explained by Ferhan Patel. Consumers pay for their purchases using electronic wallets and support start-ups and causes through crowdfunding. They use investment applications to monitor the markets and execute orders. Fintech has definitely entered daily life.
More recently, it eventually also includes the changing industry of currencies-crypto such as Bitcoin, the Etherium the litecoin and Ripple. This branch of Fintech is attracting considerable interest from investors and the media. It appears to be one of the biggest potential upheavals in the global banking sector.
Fintech is a trend, not a fad
The current consensus is that this trend will continue to soar. Fintech has indeed detached itself from the financial services sector – where it remains essential – to insert itself in each business that uses financial services. All types of businesses are affected.
This trend comes from the very nature of Fintech start-ups, small, agile and versatile. As Ferhan Patel explains they are able to work quickly and with a precision that is simply beyond the reach of titans, large financial institutions around the world. They innovate quickly and respond to needs as soon as they appear in 2020, which makes them very attractive to investors.