What is fintech?
As a definition, Fintech is usually applied to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising and even asset management.
We're at the dawn of a new era. Startups are disrupting finance, and It's only the beginning. With more funding going into FinTech than ever before, it is clear that finance and banking are about to be transformed. Traditional companies are at risk - they will either have to disrupt, or be disrupted. FinTech startups invent new ways to deliver financial services faster, better, and at lower costs. The corporates are now investing heavily and bringing in startups to help them respond.
From crowdsourcing to mobile payments, there has never been as much choice to entrepreneurs as there is presently. It’s never been cheaper to not only set-up your business, but also to expand it.
Crowdsourcing, for example, allows people with big ideas to get funding quickly and easily from anywhere in the world from people they have never met. Instead of months of investor talks, entrepreneurs can – thanks to the shop-window that is the internet – pitch directly to the world. Those with the magic touch can see the funds roll in within a matter of weeks rather than months.
Transferring money across borders, a bane of entrepreneur’s lives since time immemorial, is another area that is being reworked and reframed by innovators. TransferWise has turned the traditional (and expensive) banking solution to sending money across borders on its head and enables small firms and individuals to transfer money far cheaper than was previously possible.
The above are just a couple of the many ways in which fintech has made it easier to do business and lower costs. Fintech firms can pass on huge savings as they are far more agile than traditional banks, not having the same overheads and commitment banks are blessed (and burdened) with. Their relative lack of size also allows them to innovate and adapt in a way bigger corporations can only dream of.