It’s safe to say the banking industry is a bit behind the times.
The same tech is used everywhere you look, regardless of what banking institution you frequent. If you’ve seen one mobile banking app, you’ve seen them all, but the future of financial institutions rests in the hands of fintechs.
Banking has taken on an entirely new face thanks to technology, but it’s only going to continue being made over with the overwhelmingly impeccable fintech startups entering the game.
Post-pandemic (and even before the world shut down), fewer and fewer people visit branches to do their banking. Technology allows for banking to be done from anywhere, at any time, and this will continue to become more prevalent. Fintechs are the brains behind these operations.
From mobile payments, crypto, mobile investments, and everything in between, fintech is changing how we handle our finances. In today’s world, some apps allow us to do pretty much anything we want with our money, and the futures of financial institutions are being transformed from the inside out because of fintech.
To look at how different fintechs are transforming the game, let’s dive into what some of these different types of fintech companies even do.
There are a few different types of fintech companies today. Each company does something different for the industry. The arguably, most important category of all is personal finance. This is where any customer can find some value, regardless of who they are. Apps that help budget money, financial advice apps, and apps such as Mint have transformed this piece of the industry. Consumers no longer need to speak with financial advisors to have their personal finance questions and issues answered and resolved.
The second type of fintech is payments. Companies like Venmo revolutionized the way we send money to one another. No longer do we need to pay ridiculous bank fees. Now you can pay your Uncle Charlie the $500 you owe him with one simple click thanks, fintech!
This third type of fintech is lending. Lending fintech companies changed the way consumers borrow money.
For instance, customers used to borrow money by going directly to banks and credit unions, but now, a person can quickly be approved for a loan in as little as minutes.
The fourth category is international transfers. Do you remember the days when you’d have to pay exorbitant fees and wait an ungodly amount of time to send money over to your family in Italy? Thanks to fintech companies like Ripple, that process is much cheaper and much quicker. Fintech for the win, again.
Equity financing is the next category of fintech that has drastically changed the financial industry. Fintech companies in this category help business owners connect to accredited investors. The accredited investors trust that these technologies vet the startups looking for capital. It’s a win-win.
These are just some of the areas of the industry fintech has transformed. Think of life before Venmo or life before mobile check deposits. Generations who grew up with these technologies and never had to step foot into another bank have no idea what it was like before fintech completely changed everything.
This is why financial institutions must keep up with the times. Investing in and embracing fintech is how financial institutions get ahead of the curve. Realistically, in today’s world, there’s no way they can’t.