How Fintech Has Reshaped Traditional Banking

What is Fintech?

Fintech is a term that is generally used to describe any sort of technology related to finance, including both businesses and consumers. Technically, any company that uses mobile devices, software, and the internet is considered part of the Fintech industry. Some well-known examples are:

• Crowdfunding platforms like GoFundMe
• Online banking apps
• Cryptocurrencies like Bitcoin
• Mobile payments like Apple Pay
• Insurance facilities
• Stock trading apps

Why and how is traditional banking being replaced?

Photo by Austin Distel on Unsplash

Like most conventional industries, banking is derived from physical structures, meaning you’d usually have to physically go to a bank office and get your cash withdrawn, approve transactions, etc. If you were to shop at a store, traditional banking would mean you go to that store and buy the product within the premises. This can be time consuming and in the advent of COVID-19, risky or simply impossible.

Therefore, fintech is gradually taking over and reforming banking capabilities. It has become a fast and pain-free alternative to traditional banking, due to several reasons; among them:

• Convenience
• Reliability
• Transparency
• Consumer centric-solutions
• Easy to use
• Faster
• Cheaper

One of the key reasons why fintech is taking over the avenues that were previously occupied by traditional banking, is because of the number of services provided in one basket. At the click of a button, consumers can make use of all sorts of services without having to go through the hassle of conventional banking. In a busy schedule, such things are appreciated significantly because they tend to reduce the waste of resources and precious time that could otherwise be spent on something more productive.

Is Fintech always safe?

For anything new in the tech industry and especially with things that concern finances, there are security measures that need to be in place. Safety and privacy are a big concern in the Fintech industry.

With the surge in fintech, more data is available digitally, which can make this data more vulnerable.

However, over time, security measures have been tightened and companies have a strong focus on evolving and improving the safety of data making use of the latest AI technologies, among others.

Conclusion

Fintech has disrupted all banking and capital markets, with its fast and innovative pace. A convenient and user-friendly approach, has made it more and more popular with younger generations, who are already active tech users. Even among older people, the accessibility and its simple nature are making them move away from the traditional norms of banking. To ensure that this industry finds the right growth and security standards, businesses and consumers must collaborate to bring about an output that maximizes user satisfaction — that remains the real test.

At Space we understand security concerns and always walk our customers through the path of making the best decision for the safety of their projects and their users’ data.