FinTech and the New Consumer Market
Fintech innovations such as the Internet of Things, artificial intelligence, blockchain, and cloud computing are transforming how customers engage with businesses and manage their finances.
Fremont, CA: FinTech (financial technology) is the most fascinating and fastest emerging global business area today. While the definition is clear, the products and businesses that use newly created digital and online technologies in the banking and financial services sectors and how they are employed and their influence on consumers are far more complicated. In reality, the advent of a new generation of FinTech has had a significant impact on how people do business, transact as customers, and think about the future of finance in a relatively short period. It is removing the barriers between business services, allowing bankers, advisers, and technology suppliers to deliver essentially identical services, among other things.
New consumer market for FinTech
FinTech allows financial services companies to explore new markets while also allowing consumers in locations where options are limited to obtain previously unavailable services via mobile devices. FinTech companies are gaining access to underbanked and unbanked people, allowing them to reach and capitalize on markets that have hitherto been underserved, particularly in Asia and the Southern Hemisphere.
The banking sector has long been in command in the West's legacy economies. On the other hand, Western markets are slower to adopt new technology than other areas of the world due to current systems and traditional financial services providers, and institutions' aversion to change. China, India, and other Asian economies can outperform their Western counterparts in terms of growth. In the later 90s and early 2000s, banks and businesses in these markets began creating infrastructure and are now reaping the rewards. For decades, economies in the Southern Hemisphere, such as the Philippines, Indonesia, sections of Latin America, and countries across Sub-Saharan Africa, have been mostly underbanked or unbanked, but this is changing as mobile payment and wallet innovations proliferate. Most customers in these markets now have easy access to smartphones, which allow them to conduct digital transactions, thanks to telecommunications networks. Mobile phone sales in these areas are expected to reach billions of dollars in the near future.
FinTech is literally transforming human lives and habits by allowing them to trade, bank, and exchange money without having to deal with a human. However, the financial sector faces a number of obstacles to overcome, particularly in the areas of regulation and data protection, in order to gain customer trust and completely overtake the market. While FinTech innovations have been lightning fast, FinTech firms till now have only discovered what is conceivable and bound to happen in the next years. With big data, blockchain, AI, among several other technological advancements already in use or on the horizon, business leaders should look for ways to incorporate FinTech applications into their own business models in order to gain tomorrow's customers.