Financial technologies are converting two human necessities, a phone, and a bank account from being a cost to profit centres and this is also making businesses and economies more resilient in times of crisis such as the COVID-19.
Financial technology (Fintech) is used to describe new technologies that seek to improve and automate the delivery and use of financial services. At its core, fintech is utilised to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilising specialised software and algorithms that are used on computers and, increasingly, smartphones.
Fintech companies help to provide liquidity to the economy via equity and debt financing solutions. Data is being analysed better. Big data is turned into meaningful data for better decision-making. It helps the world to create an environment where people who were once excluded from financial services can be included. People familiar with the industry trends say Fintech can reduce poverty globally and can really bring economies to life.
The Global fintech market was valued at $127 billion in 2018 and expected to hit $310 billion by 2022. Massive growth in the digital payment sector is driving this.
The covid-19 pandemic with its accompanying social distancing restrictions forced businesses to turn to more digital processes and they are looking to the fintech sector to provide some rapid solutions.
Businesses that are going to be successful are those that are bringing and applying technology effectively to the market. Loyalty and commerce come together. The more data businesses get that they can pass back round the funnel to drive more payments, again and again, creates an ever-flowing cycle.
Fintech is important because “it is global and helps to provide access to financial services in a much easier way, on your mobile phone you can nowadays buy any financial product. It is cheaper,” Susanne Chishti, CEO Fintech Circle said in the first Fintech film which premiered on Wednesday produced by Fintech Circle in association with ITN Productions.
The sector was almost born out of the last financial crisis of 2008. And the nice thing now is that the Fintech companies help other companies to survive the pandemic.
Lots of government stimulus packages go through fintech companies, supporting economic recovery and growth efforts. When government stimulus packages stop in the coming months, fintech companies will step up to provide liquidity to the economy to support recovery by providing loans to companies.
“Your ability to use the phone to connect with a product through the camera, a barcode, or QR code or even image recognition with bits of information fed into a mobile application is revolutionary,” said Julian Fisher, CEO Jisp, an award-winning tech company that digitises products and experiences to bring the best of online into physical spaces through its app
Jisp launched in June, at the peak of the coronavirus pandemic and, provides convenience store owners across the United Kingdom the chance to offer shoppers a digital, frictionless shopping experience just like the big stores.
Smaller retailers struggle to market themselves to today’s always-on shoppers. They often lack the skills, technology, or resources to digitise and compete with larger supermarket chains.
Stephen Archer, owner, Hightown Convenience Store said “this is something I could have only dreamed about many years ago but now we have a website where customers can order in whatever way they want to.”
The future of Fintech will continue to be a booming one. It will grow. “We have seen many fintech companies been founded in the last few years and we see more companies being acquired. Either one fintech company acquires another or banks and insurance companies acquire fintech companies,” Chishti said.
Technology giants such as Facebook with its block-chain based payment system Libra and Google with the Google Wallet are making their entries into the sector. This will lead to more corporate mergers and consolidations.
