Fintech has been one of the highly trendy words in the technology world in the last years along with big data and the internet of things. And just like these, the meaning of fintech is somewhat clear and somewhat vague at the same time. In this article we will explain to you what exactly fintech is and describe the 5 most significant trends in this technology field as well as its role in web and mobile applications development.
What is fintech?
Usually, when one speaks about fintech, or financial technology, one implies the startup scene in the IT field that changes the way people interact with money. This includes various technologies that bring payments, loans, crowdfunding, money transfer, personal finance management to a completely different level.
What are the trends?
Apparently, as we discuss fintech as one of the trendiest technologies, it must imply that the field actually expands with a high rate. Venture capitalists tend to pay attention to fintech startups investing huge amounts of money in these financial software providers. According to market estimations, approximately 20 billion US dollars in a year are invested in the fintech startup scene. Why is it so? The reasons seem obvious. Fintech is going to change our relationship with financial resources for the better, simplifying and fastening all processes involving money. Thus new bright fintech startup ideas arise all over the world, enterprises and corporations invest in this field and we see the most viable and brilliant startups gradually revolutionising the world of finance.
2. Banks cooperating with fintech startups
Banking institutions cooperating with fintech startups may seem almost the same as government executives cooperating with schoolchildren or maybe even the opposition, depending on the viewpoint, but this is not at all absurd or preposterous. Surely, many banks still see fintech startups as competitors and even threat to their expansion, however, the majority of banks view them as sources of new ideas and possible collaborators. The cooperation of banks with fintech software providers can actually be the ‘win-win’ case. Fresh fintech startup ideas introduced in the banking field can improve the efficiency of this business. A number of banking institutions are interested in investing in fintech startups or even acquiring them. Fintech startups usually bring new ideas and platforms, payment and money transaction solutions, hence it is reasonable for them not to stand alone, but to be integrated into banking systems.
3. Big Data
Here comes again the trendy big data conception that is penetrating into numerous fields of our life and technology. It finds really great use in the world of finance, allowing to collect huge amounts of unconnected data, to analyse them and to make useful predictions based on these data that will allow making the right decisions. Here is an example: you want to make sure, whether a person can pay off the loan or not. Thus you will not only collect the official documents but also the client’s social accounts data and analyse them all in a complex to make the most precise decision. Or another example can be making automatic predictions about exchange rates or other parameters of the financial market based practically all the relevant data you can find on the web. This may sound quite fantastically but actually it is possible either now or in the nearest future.
4. P2P lending platforms
Talking about banking institutions and fintech cooperation we should mention the P2P lending platforms for this kind of service is actually a competition to the banking system. Peer-to-peer lending is a new trend on the fintech startup scene that changes the traditional way of taking and giving loans. What is basically new in this way? The process of P2P lending doesn’t require any intervention of banks since the lender and the borrower interact directly with each other. Such a process of money lending happens completely on the platform of the financial software provider, where the borrower gets money from the lender. And here comes the safety issue. What if…? Peer-to-peer lending is a great idea, however, the financial software company has to make the system and the lending processes as secure as possible and the clients have to always remember about the risks. In the perfect case, this is indeed the win-win: the lender gets more money and the borrower pays less than in the case of the same procedure with a bank as an intermediary.
5. Going social
You surely can notice how much social activities on the Internet have gained popularity. It is an essential part of many people’s lives. Messengers, social networks and social entertainment apps have millions of users. Many financial software companies recognise these trends and try to make financial services more ‘socialised’. How can one join up financial digital services with the social ones? You probably have heard that chatbots are used in many businesses to enhance and optimise interactions with customers. Banks do not fall behind in this services field. There are also financial software providers that offer their clients mobile and web applications development solutions, allowing to pay group bills in cafes and restaurants splitting the price between all the group members. This is an also a good idea of SaaS solutions for restaurant chains.
The Smartum Pro team offers a wide range of web and mobile applications development services, including financials solutions for businesses and startups. We provide our clients with meaningful recommendations to create high-quality mobile and web software products for achieving their business goals and optimising their business processes.
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