In this article, Sergey Lypchenko discusses some essential elements that you should know, to understand the complex impact of FinTech trends
Nowadays, there are two kinds of product that are created on the basis of FinTech. The first type offers different financial services with FinTech apps, which is based on the B2B model. Speaking about the second variant, there are apps oriented on end-user. Using the B2C model, this type was created in order to solve a complicated task — to compete with financial service providers.
Whilst that type of solution continues to exist, FinTech projects can vary immensely: from mobile apps to the trading area, currency exchange area to personal financial management.
FinTech impact on business and private clients
The development of FinTech services allows entrepreneurs to stop visiting the banks to get money. Such services as crowdsourcing, mobile payments, and other ones made it easier and cheaper to get financing for the business.
1. Crowdsourcing
People who have interesting ideas can use this direction. It’s quite popular because any person can invest money in the project despite their location. So, now instead of usual presentations for investors, it’s possible just to use the Internet and spread the data about your idea.
2. Funds transfer
In the past, money transferring was not fast and cheap. That’s why FinTech startups started to develop this field. According to the platform Think with Google, 69% of smartphone users tend to transfer money using a mobile app, not a website. There are a lot of online services for transferring money, e.g. TransferWise. This gives small companies and private users an opportunity to send money at a lower price.
There are a few innovations that are quite popular and can seriously influence many industries. Below we’ll discuss some of them.
Take out loans using Apps
A lot of people nowadays have credit cards with a specific payment limit. So, there is a possibility to take out the loan online. There are a lot of web or mobile applications like KreditBee, MobiKwik that provide such kinds of loan. Here are some of the user benefits:
1. Saving time
The users can apply for a loan and get approval within 15 minutes.
2. Getting money fast
If there is a positive decision about the loan, the whole sum can be transferred within 1 hour to any banking card.
3. Tracking the data
The users need to get access to their personal information, e.g. balance, arrears, percents, etc.
As you can see, this trend can completely replace the habitual crediting process. Nowadays, it’s unnecessary to stay in lines, sign a lot of documents and go through
Chatbots
Artificial intelligence is quite widespread at present and, of course, there are a lot of ways for AI to improve financial processes. For instance, nowadays, chatbots gain their popularity. There are able to conquer a lot of tasks, e.g. send notifications about any change, provide helpful information, and more.
As a result, chatbots increase users’ loyalty. So, their integration can bring a lot of profit to your business and make the product more competitive. There are several banks all over the world that have already implemented chatbots and even got profit. For instance, Bank of America has introduced the chat-based assistant Erica. It was created to send notifications to clients, pay their bills and so on.
One more interesting example is MasterCard. This company has moved even further and developed a chatbot on Facebook Messenger to improve digital services. As a result, users can look through their purchasing history, balance, and other transactions.
Websites for potential investors
The investment market is full of rules. FinTech investment trends can help you follow them. Nowadays, different online platforms are developed to provide users with full-fledged consultation on how and where to invest their money.
Created websites and applications give new investors a piece of advice about profitable investments in their specific case. So, the services analyze the data and find the best variants to invest money.
Websites for investors have a great impact on the business area. Moreover, such platforms are able to show newcomers what financial literacy means in an applied context.
The main example of a website for potential investors is Tridea Advisor. This platform offers users three phases of financial planning — early working years, later working years, retirement. The founders claim that each stage has different financial objectives, so they provide a professional guide for every phase.
Online brokers
A broker is a financial institution that acts as a mediator in dealing with shares, currencies and more. Online brokers give the platform for buyers and sellers to perform the trading operations.
Starting in this kind of FinTech business, it is important to gain the reputation beforehand. A client should be confident about your reliability. The choice of a broker depends on a lot of factors such as trade expenses, suitability to the trading strategy, etc.
Charles Schwab & Co is an online Broker based in San Francisco, California. This platform is appropriate for both — beginners and active traders. The company offers many innovative tools, e.g. robust trading platform.
Online broker business is one of the popular technologies because it allows people to trade and gain profit just utilizing their phones or laptop.
Online insurance
Nowadays, online insurance is based on fair product cost. The ‘low-cost’ model is used because there is no need to rent offices as well as hire insurance managers.
Insurance agreement conclusion happens online today. As a result, people don’t need to visit the office of an insurance company, arrange meetings with an agent, or fill in a lot of documents. The clients have an opportunity to ask for insurance using a web or mobile app. They just need to enter their personal information and then get insurance policy via their e-mail.
New York Life is one of the best insurance platforms, to my mind. This company provides clients with an opportunity to get life insurance, long-term care and more. New York Life offers to use third-party banks, brokers to get their insurance.
As you can see, the users are able to manage a lot of tasks utilizing just their smartphones and appropriate software. So, if you want to create your own FinTech website or application, you may just find a reliable software development company and develop your own solution.
Sergey Lypchenko
Technical writer
Hey Sergey,
Very good post! What do you think about the impact of fintech on traditional companies?
Cheers 🙂