What is Fintech, and Why Does it Matter?
Financial technology (“Fintech” is typically used as a portmanteau of these terms) is new tech that improves, de-risks, and automates the delivery and usage of financial services. It helps companies, business owners, and consumers better manage their commercial operations and processes by utilizing specialized software and algorithms.
Fintech is the modern-day acronym for many of the latest technological developments – from payment apps to cryptocurrency. Powered by the latest technological developments with financial services or applications, Fintech has helped businesses – especially start-ups – provide better financial services to all concerned.
Fintech primarily helps everyday customers more easily utilize technology to help them with money in their daily lives, from simple transactions to complex financial products. However, it has business-to-business applications as well.
From here onwards, it is possible to manage funds, trade securities, purchase food, or maintain health insurance through Fintech, all on your phone!
Dominating the Industry
It seems that investors are bullish on the Fintech industry. According to CNBC, investment in this sector soared more than 18% in 2017 alone. For over 2 billion people worldwide lacking the convenience of a traditional bank account, Fintech provides an easy option to use financial services without the need for a physical bank location. To no small extent, Fintech very efficiently serves this specific purpose: to provide consumers direct access to their financial lives through easy-to-use technology. Little wonder, it is a tempting industry for any investor!
Fintech has become an essential tool for industries like crowdfunding, blockchain and cryptocurrency, mobile payments, insurance, budgeting apps, and several others.
How Fintech Has Helped Companies During COVID-19
Fintech has played a crucial role in businesses affected by COVID-19.
66.4 percent of small to medium-sized business (SMB) owners expect to generate more online sales after the COVID-19 outbreak than before. The said figure includes 34.8 percent who said they’ll rely “somewhat more” on such transactions. Another 31.6 percent say they’ll lean “much more” on online sales. Only 3 percent of a polled group said they’ll rely more on brick-and-mortar sales in the future. Fintech is at the center of all digital sales processes, and many entrepreneurs are leaning on it more quickly and more often than they thought they would.
The COVID-19 pandemic has forced many SMBs to shift their focus from physical traffic in their brick-and-mortar stores. These stores want to expand their product and service set to be less reliant on physical customer transactions.
For example, Shopify has recently focused its efforts toward making it easier for local businesses to open “digital outposts” that they can efficiently operate in tandem with their brick-and-mortar shops. It helps increase transaction flow and reduces dependence on physical customers.
Earlier this month, Shopify announced the launch of a “rebuilt and reimagined” omnichannel point-of-sale setup designed for the COVID-19 era. Shopify called the offering a point-of-sale opportunity that brings “in-person and online sales together in one place,” according to a company announcement.
“Retailers need help right now. Shopify is doing everything we can to help retailers adapt to current challenges and come back stronger,” said Ian Black, director of retail at Shopify. “We are releasing our new Shopify POS to give retailers — especially small, local businesses — every possible advantage.”
Fintech is here to stay. Take advantage of the ever-evolving line of fintech services the market offers. You won’t regret it.