Traditional banking sector has been the major part of financial industry. Regardless of several issues and problems, they have ruled the world of finance for many years because they were the only option available to the people to save, transfer and secure their money. But, the biggest financial crisis comes in year of 2008 in which banks face the huge loss of money and trust, as a result they start taking strict decisions in how they will operate and they stop focusing on new innovations, so the huge gap is created in what the customers expecting from the banks and what banks are providing. To fill that gap, a term is introduced by the economists and creative thinkers, which is called as FinTech.
FINTECH EVOLUTION AND ITS AFFECTS ON BANKS
The technologies like internet of things and mobile industry are the key engines in rising the FinTech industry, as of now people are using their smartphones to perform all banking operations through number of online-payment apps like Alipay, WeChat or Applepay etc. They are getting loans from financial services with ease which is very complex task when we go to traditional banks and we have to fill number of documents etc. There are also crowdfunding financial services such as Kickstarter where we get funds for implementing our ideas and starting new projects.
Children can now open up their own bank account through financial services like Facebook and Apple rather going to traditional banks where they will face age issues or other problems.
Most importantly, a revolutionary change FinTech is bringing, as it has reached out to those unbanked people in both developing and developed countries who don’t have access to traditional banks, but now they are becoming underbanked by being the part ofFinTech.
HOW FINTECH IS IMPACTING THE BANKS
It is obvious that the biggest impact of FinTech will be on those who work in financial industry. And, this rapidly increasing popularity of FinTech has already started impacting the most traditional financial institutions such as banks in way that they are considering FinTech as a real threat to their business.
The thing which worries so much these traditional entities like banks is that there are thousands of FinTech startups offering the services which were only offered by the banks such as online payments, and loans at lower and cheaper costs with fast response and delivery.
Now, some popular banks have become the part of FinTechand now they are also being digitalized and providing such services to their customers that are user-friendly and efficient, that is because they have realized the power of FinTech and they have reached to this conclusion that the landscape of financial industry is changing and in order to survive they need to evolve with this revolutionary change of FinTech. So, it can be assumed that some banks will survive with this evolution, but many will not.
Finally, the rapid growth of FinTech in recent years shows that bankers of future will be different from the bankers today and financial platforms of the future are not going to be our traditional banks but the technology firms, designers, developers and creative thinkers.