In Financial Industry, FinTech has been one of most talked term in 2015
along with disruption, innovation & customer experience. Financial industry
covers many financial services like banking, lending, payments,
remittance, insurance, investments and trading services and has been using
technology in a major way to serve its retail, HNI & corporate customers
for many decades.
FinTech firms are the new breed of companies
which apply new innovative business models & technologies to extend
financial services to larger or new consumer segment in line with digital
lifestyle or offer faster & exceptionally better
solutions to businesses. FinTech companies are fundamentally very different in
their approach from traditional technology product / services companies as you can
notice from few examples below.
Most FinTech firms are often driven by
following principles
Democratisation: FinTech is leveling
the financial playing field by making high-level, top-of-market services
more accessible to all kinds of customers, not just institutional clients and
high-net-worth individuals. WealthFront, NutMeg & Betterment provides
access to high value investment services to thousands of new customers.
Disintermediation of traditional
business models: FinTech is cutting out the middle man when it comes to making a
financial transaction of any kind.
Prosper, LendingClub, SoFi in US, Zopa & FundingCircle in UK and
Monexo in Hong Kong are already offering alternative lending options to
consumers & businesses.
Customer experience: FinTech is making banking to be as
user-friendly as shopping or socializing have become. Moven & Simple
banking Apps empower banking customers and gives them tools to control and
manage their personal finances as they want. Fidor Bank in Germany is a
trailblazing example in digital banking space. Venmo & SnapCash in personal
payments and Xoom & TransferWise in Remittance have redefined customer
experience.
Many new innovative solutions are being developed and offered by FinTech firms even in Asia such as digital debit/ credit card by MatchMove, Bitcoin based remittance services by BitSpark and group savings & borrowing solution by KyePot. Many FinTech startups are also leveraging big data and analytics to transform insurance services such as Heartisans of Hong Kong (generating early heart failure warning using data from fitness bands, thus enriching health risks assessment for policy underwriting)
FinTech
firms are disrupting financial services industry and setting new standards for
trust and transparency, efficiency and connectivity between consumers and businesses
alike. An alternative finance industry though currently very small to
traditional financial industry size is growing fast to provide access to high
quality information, product & services meeting consumers new expectations.
FinTech solutions leveraging mobile
technology are also making it feasible to widen reach of financial services to
billions of unbanked people and empowering local SMEs to serve them better.
2015 has been a very good year for FinTech
in Asia as it attracted almost $4 billion investment largely in payments &
lending startups.
Hope 2016 will also drive even larger investments
in FinTech start-ups & Innovative solutions to transform financial services
for better.
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