The Fintech industry is causing massive disruptions across multiple financial industries – banking insurance, investing, payments, and lending are only a few of the industries that Fintech products/services are seeking to disrupt. However, many conservative folks have an erroneous notion that Fintech is only another passing fad. They believe that traditional financial firms already have deep roots and that a few rag-tag startups don’t have what it takes to upend the industry. This piece examines five reasons Fintech firms will continue to thrive alongside traditional financial institutions.
1. Unlimited Possibilities Ahead
It is hard to define the Fintech industry in a single all-encompassing definition because the industry is constantly growing and evolving. For instance, some popular fintech sectors include Blockchain, mobile banking, cryptocurrency, insuretech, predictive analytics, crowdfunding, peer-to-peer lending, and payments. In addition, the global financial landscape still has billions of people who are unserved or underserved by traditional financial institutions, Fintech’s ability to bring financial inclusion to such markets will continue to provide bullish tailwinds for the industry. The Fintech industry can only be limited by the vision and imagination of stakeholders in the industry – right now, there are unlimited possibilities ahead.
2. Increased Transparency in Services
Fintech will continue to thrive because it provides more transparency in the erstwhile murky world of financial services. With Fintech products, you know how much money you have, how much you are paying in charges for the product/service, and you know what’s in it for the Fintech firm. More so, the Fintech ecosystem shows a great degree of collaborative spirit in which stakeholders share market insights in order to propel the industry to greater heights.
3. The convenience that drives ecommerce
Fintech will continue to thrive and succeed inasmuch as there’s a place for ecommerce in the world because Fintech is the brain that drives ecommerce. Fintech solutions provide better ecommerce platforms, cheaper and efficient payment solutions, smoother checkout process, and faster delivery system. Ecommerce has displaced brick and mortal stores in many markets and traditional retailers are now scrambling to build up an online presence.
4. The Customer is King
Another factor that will ensure that fintech startups succeed and thrive alongside traditional financial firms is their fixation on delivering customer-centric products. In the years past, banks and other financial firms will create a product and expect customers to fall in love with the product. Now, Fintech firms look at the needs of the customers before they start their product development process. More so, Fintech firms are not afraid to pivot on their initial product and head towards another direction when the needs of the customers change.
5. Startups are talented and motivated
The last point that supports the thesis that Fintech startups are here to stay is the fact that the founders and co-founders of many Fintech startups are talented and motivated. Many people starting Fintech startups have industry experience in the traditional financial sector and they know what’s wrong in the industry. More so, startups usually have an early team made up of goal getters with multiple skills sets.
In addition, startup founders are often motivated and their passion and motivation is often enough to take them through rough spots. For instance, startups have solutions that could knock off traditional financial firms off their high horses by providing competing services; hence, they won’t give up until they reduce the clout of traditional financial houses. More so, the total addressable markets for some Fintech products often run into billions of dollars and billion dollar opportunities are enough reasons to succeed.