The Fintech Phenomenon
To improve customer satisfaction and experience, and making full use of the advances in the digital world, banking, which is one of the most traditional sectors, has decided to make an important commitment to business intelligence and propose alternatives using technology.
One of the best ways of getting to the heart of this new scenario is to work with companies that have a good understanding of digitalisation and finance. Fintech companies offer banks an extensive range of specialist financial services that provide users with greater access to bank products and more control of their money.
From traditional banking to Fintech
One of the great advantages of Fintech is that it can be used to update the image of the sector, but the transformation of the financial sector with the arrival of digital technologies affects all areas. In fact, according to the report ‘Fintech 2016’, by PwC, over the next five years around 80% of retail banking will undergo changes with Fintech. This same report expects that by 2020, some 60% of traditional bank customers will be using mobile app services to manage their finances.
The phenomenon is gaining pace to such an extent that the traditional financial sector believes that the Fintech Phenomenon may put 23% of its current business at risk over the next five years, but, according to the PwC report, this may rise to 33%. Retail banking, payment methods and services related to asset and equity management are, in that order, the ones that will experience the most radical change.
Fintech is gaining ground in the United States and Asia, as well as in Latin America, where countries such as Chile and Colombia are already becoming digital economies. In fact, Fintech now has almost 60 companies registered in countries like Chile, while in Colombia it’s almost 80.
In Spain, the Fintech Association of Business had over 215 on record at the end of 2016. International growth in the sector tripled in 2014 compared with the previous year.
Optimising finances through technology
Fintech companies are making full use of the new technology to improve offers from banks or promote alternatives to their products. These are energetic, streamlined companies that introduce technological services to update and make innovations to big traditional companies. The time has come because their territory has been invaded by newcomers, such as Facebook, Paypal and Google, who are offering new alternatives in the field of technology.
Fintech leads the field in mobile banking, compliance, crowdfunding, crowdlending, cryptocurrency (alternative currencies) and Forex (foreign exchange market), automated processes management and digitalisation, risk management, payments and transfers, loans, insurance and financial advice services.
Perhaps the most well-known use of this technology is the one used by companies who allow their users to manage and optimise their finances with it.
Leading companies in this field, such as Fintonic and Ahorro.net, have convinced growing numbers of users that this technology is easy to use and about its usefulness. Perhaps Fintech’s most satisfying experience is that they offer ‘financial fitness’ solutions, as this technology gives users levels of information, transparency and control not normally found in traditional banking.
Also important are the popular payment and collection services on mobile devices, such as Paymet and Yaap, although the telephone companies themselves are offering increasing possibilities.
All users have to do if they want to pay for their purchases with their mobile phone is create a profile on one of these platforms and choose the card they want to pay with. They also offer a geolocation service to inform users about shops that accept this type of payment. It is expected that this service will be extended so that paying by mobile phone will become a general everyday occurrence in shops.
Another service offered via Fintech is guidance to individuals looking for finance from companies who offer it. On their websites, they provide easy-to-compare information to help users decide on the company that best suits them. There are lots of examples, including Moneyman and Bankimia, both platforms for applying for quick loans (they let you know and send you the money within 15 minutes) that do not require paperwork or guarantees.
Another application of this technology is that it can be used to transfer funds at very competitive rates. This is the case of companies such as Transferwise, Kantox and Flywire through which money can be sent internationally thanks to their low administration fees and at a real-time exchange rate.
What we are seeing is that the proliferation of technology and customers’ growing commitment to everything digital has changed many aspects of user behaviour; from product research to bank buying patterns. Fintech offers a wide range of opportunities to improve bank customers’ experience.