Fintech is the use of technological innovation to provide financial services. It’s an umbrella term that covers mobile banking, e-banking, online banking, digital finance, peer-to-peer lending and more.
The word “fintech” was first used in the late 1990s in Japan where it referred to any company that provides financial service using information technology or telecommunications.
The modern meaning of the term only emerged in the 2000s as a catchall for all technologies involved in digitizing finance – which can be read as “financial technology.”
Fintech is now a well-established industry with over $120 billion invested globally since 2010.
Let’s take a look at how each of the major subsets of Fintech will evolve as time goes on.
Mobile banking technology has been on the rise for a number of years and is continuing to grow exponentially. The convenience, security and the dramatic drop in costs has turned this tech into the norm. Before mobile banking, a person would walk into a lender’s office or send an application through fax. Now you can get faxless payday loans from your own mobile phone. Literally 24/7.
Some experts predict that by 2022, mobile banking will account for approximately $1 trillion in assets. This means that we won’t only be using our phones to transfer funds, or pay bills, but they will also serve as a primary source of banking services.
The future of online banking is going to be a lot different from the past. Mobile banking will be the new norm as more people are using mobile devices for everyday things.
In the next five years, e-banking will continue evolving at a fast pace to cater to customer needs. More online services will be offered by banks as they try to remain competitive with one another.
In 2022, you should expect to see banks offer a variety of investment packages and products that are tailored for your unique needs which can no longer just be fulfilled by a bank account or credit card.
Online banking 2022 will be a much more personalized experience. Customers will expect to see their money move in real-time and be able to make changes on the fly, at any time of the day.
We could also see banks offering flexible working hours for their employees and customers to make it easier for them to access accounts and get things done during work hours.
The rise of automated chatbots that can provide personalized service 24/7 is no longer a question of if, but when will they fully replace CS reps.
If you think about it, it’s all happening right now.
Digital finance in 2022 is predicted to be an $8 trillion industry, surpassing both the global hotel and automotive industries. We are witnessing the rapid rise of digital finance with companies like Apple Pay becoming mainstream.
Companies like Stripe, which allows merchants to accept credit cards for goods or services on their website, are aiming to make it easier for smaller retailers to accept payments online. By the way, Stripe is more Web 1.0. Expect some next level processors to really change the game in the next few years.
The 2020s will see new forms of virtual currencies emerge and develop beyond their initial uses. These new forms of currency will come with different risks like data protection and security risks that may arise from hacking or fraudulent transactions by exchanges or third parties.
Peer To Peer Lending
Peer-to peer lending is a strategy in which individual investors, or “peer”, provide funding to other individual borrowers. In return for their investment, the lenders receive a share of the interest charged on the loans.
In China, online peer-to-peer lending has been around since 2005 when Renren established a P2P platform called Xiaonei (meaning “on one’s own”). The platform has provided loans to more than 10 million people and generated over $500 billion in transactions.
North America and the world is just beginning to catch up to this and the future looks bright.
Fintech is here to Stay
In a world where everything can be bought and sold online (Almost), global currencies have to adapt as well.
The future of money will be based on how much we share with the people around us. Sharing is not only something we do for others, but also for ourselves. We have the tech, but let’s not forget what Fintech is for.
To help us all.
The future of money is shifting from just a transactional system to a communal helping system. We should not only be looking at how valuable something is, but also at what it can do for others and how it can make the world a better place.
Money should be used as fuel for creativity and innovation, not as an end goal in itself. You can, but at the end of the day, you have to ask yourself . . . do you want to win at making money?
Or win at life?
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