What is Fintech?
Fintech, or financial technology, is best described as a business that offers financial services through using software and online services. Fintech is quite often seen as the way of the future when it comes to financial services. “Obviously, Fintech’s main competitor is other banks, however banks struggle to keep up with Fintech companies simply because of efficiency that Fintech offers its customers”, says Saar Pillsof, finance specialist. “Fintech is extremely appealing to people who are very tech savvy and switched on overall”. Most people nowadays would prefer to deal with transactions and other financial aspects without having to visit a bank or an ATM every time. This is what Fintech companies offer.
Pros of Fintech?
The obvious upside of Fintech companies is the efficiency of it all. Millennials are adopting the concept of Fintech, simply because the control that they have within their own homes. Gone are the days where you must visit banks, stand in lines for hours to set up an account. People just prefer quick and easy banking. Another upside of Fintech is that it has become relevant at the perfect time. Did you know that it is estimated that there is 7.2 billion mobile phones on planet Earth? That’s more phones than actual humans. This should be a perfect signal as to what way the world is heading towards. That’s right, a digital world. Soon enough, people will forget the days where everyone didn’t have a smart phone. This is why Fintech is so suitable right now. Who would have thought in the late 1,900’s that the world would be like the way it is now? It is inevitable that Fintech will slowly become more relevant than actual banks are right now, which could actually be more worrying than anything else.
Cons of Fintech?
The greatest threat that Fintech poses is that it threatens the infrastructure that banks have built while they have reigned supreme. This is troubling because the established financial infrastructure and institutions are being threatened. Fintech is literally challenging the foundations that banks and other institutions have leaned on since forever. Fintech is truly great innovation, but one of the threats to this is whether regulation can keep up with this revolutionary software.
It is known that anything that is applied to the digital world will generally experience growth more rapidly than ever before, which is great, but can we keep up with criminal activates? It is extremely hard to tell, simply because this is all untracked ground. We have never seen anything like this before, so it is likely that regulations we set won’t be able to keep up with our innovation, which can be dangerous. History has showed us that one man can innovate, and another man can circumvent.
Whether people like it or not, Fintech is the future. It is hard to tell whether this will be a good or a bad thing, all that we can do is watch and see whether we are able to handle such a drastic change to the way we live.