For ages, physical money – coins and banknotes – were the only things we could use to pay for the goods and services we needed. As technology evolved, banks and other financial institutions appeared, offering us a variety of payment methods to reach out to. Today, we can use a series of e-wallets to pay for goods and services online, use our credit cards to instantly pay our bills or top up our account in the Betway app, and transfer money from one corner of the world to the other almost instantly thanks to the innovations banks have added to the mix. There are, in turn, startups – not banks but disruptive financial institutions – that are changing the way we pay online and in real life.
Fintech companies have the goal to revolutionize the way money is stored, transferred, and spent in the new, digital age. As their name suggests, they use technology to improve activities in finance and make them more accessible to the general public. They are not only startups, though – there are established financial institutions, too, that are working on transforming financial services like insurance, trading, and risk management. Fintech has seen an explosive growth in the last couple of years – investment in financial technology has grown from around $930 million in 2008 to over $22 billion in 2015 and over $31 billion in 2017. Some of the most prolific Fintech incubators are in London, Stockholm, Amsterdam, and Lithuania – the country is seen as the startup centre of Europe, and lately, it is becoming a hub for Fintech companies, too.
Fintech is expected to leave a massive footprint on the financial industry in the coming years – and perhaps sooner than anyone might think. On one hand, the general consumer will be able to benefit from services like peer-to-peer lending and unified payment interfaces, not to mention instant money transfers as opposed to the delays currently usual in the banking system. Paying the bills is far easier when using a smartphone than to travel to the nearest city and stand in line at the bank, especially when it comes to remote areas. And the various methods of automation will allow people and companies to open accounts, make deposits, transfer funds, even create portfolios and manage all their documents without ever interacting with a human being.
And most of these innovative services will be centred on the device that has become the centre of our digital lives lately – the smartphone. Most of these services are mobile-first, especially attractive for those who use a smartphone as their primary – or perhaps even single – computer.
