How Fintechs are broadening our Financial Services Industry access
New technologies are disrupting the financial services industry. Individual savers are among the winners of this transition, whether traditional financial institutions are ready for it or not. From banking and payments to crowdfunding and peer-to-peer lending, Fintechs are smashing old business models on its way to crowning new rulers in the financial world. And there is no turning back.
The road to the Fintech Revolution
Technology is changing at a tremendous speed. The financial sector is seeing its impact through a massive migration of assets from different traditional financial institutions towards Fintechs. Such value migration is changing the way the financial markets are structured and represents an opportunity to individual savers to access information and investment opportunities that before were only accessible through expensive financial intermediaries.
The current democratization of access to financial and investment information is a perfect example on how for the first time in history individual savers have an ally in Fintechs to access capital or invest to overcome the existing low-interest rate environment.
Making Financial Services Accessible
Financial inclusion is among the biggest challenges Fintechs are overcoming. Their current growth shows how critical such value proposition is for the individual saver that now thought a simple computer or smartphone can access financial products and significantly impact their current and future economic perspectives, all over the world. For the first time in history, average consumers are getting the opportunity to buy financial products and services that are simple, useful, affordable, responsible, and sustainable. Fintechs allow all this while fixing additional problems that persisted forever in the way we traditionally manage money.
Fintech Investing Solutions with focus on P2P Lending
Also known as crowdlending, peer-to-peer (P2P) lending allows individuals, small businesses and entrepreneurs to secure funding. Fintechs are in the cutting edge of the technological development that allows to securely manage the money loaned by thousands of individuals with savings who are looking to invest their funds and see a return. As the loans are facilitated by P2P platforms and not banks, they have no minimum loan amount and can offer better interest rates for both parties. They are also quicker and more efficient than bank loans, as the automatic processors eliminate the need for a middle-man, and lenders can customize how long they want to lend for. The success of P2P lending is owed in part to the changing attitudes towards traditional lending and saving through banks that Fintechs made possible; as a more “for the people” option, P2P lending puts consumers back in control and provides options for savers to endure poor returns from a low-interest rate environment.
Competition as Higher Value Proposition Driver
A different aspect that needs to be consider and that strongly affects the financial services Industry is the increasing number of distinct offers among competing Fintechs. Due to this new reality, savers actively expect more high-yield account options in the future. An entirely new generation of people adopting these products means the consolidation of an entire new process to work with financial products. Traditional financial services need to compete with these Fintechs that offer a really strong value proposition and great customer experiences, and this reality is shaping the entire industry.
Fintechs are not only changing the way we relate with financial products, but it’s truly affecting the way we think about our personal finances. These are just some of the ways Fintechs are revolutionizing traditional banking methods, and what that means for our financial future. For you the saver, the intensifying battle for your deposits from a wide range of players brings great promise, since more choices are generally great news for consumers.
About the Author:
Carlos Boto is the blogger behind Savings4Freedom. He’s an entrepreneur, and a professor of Management and Entrepreneurship.