What is a FinTech?
FinTech, or Financial Technology refers to up-and-coming technology that looks to improve, or radically change the delivery of financial services. In the past 5-10 years, the number of FinTech startups almost doubled to 26,000, and in 2022 the global market revenue for this industry was USD 257.26 billion, and by 2030 is expected to rise dramatically to USD 882.3 billion. It is safe to say the FinTech market is rising. But why?
Examples of FinTechs
Many of the more modern business sectors are FinTech companies, such as PayPal and Venmo, which look to facilitate payments between people and businesses at just the click of a button. PayPal has revolutionised the quick transfer of money (especially between people), due to its instantaneous transactions. Bank transfers depend on the country/location of both the sender and the receiver, as well as the service provider used to conduct the transaction. It is evident why people prefer to use PayPal, and of course, variations of this concept such as Venmo, to conduct their transactions.
You may have also heard of Revolut, the ‘All-in-one’ finance app, which aims to combine all facets of financial management into an easy-to-access centralised location. It can host banking services for retail businesses and customers, stock trading, peer-to-peer transactions and cryptocurrency exchange. Revolut is a prime example of what modern-day FinTech companies aim to do- to provide global accessibility to all customers using new banking technology, including those who do not have access to conventional banking methods.
Sunbit is a growingly successful FinTech which works with businesses to provide flexible payment methods to finance payments for unexpected purchases. Aside from accessibility, FinTechs such as these also work toward financial flexibility and comfort for the user, which is very helpful for low-income families to pay sudden purchases such as medical bills.
Why are FinTechs important for the future?
As technology advances, it is increasingly important for financial companies to leverage this advancement to continue to support the financial needs of a growing population. If the rest of the world advances, financial management cannot be left behind- still as slow and clunky as ever. FinTech companies aim to keep financial management as modern as the rest of the world. With growing living expenses around the world too, FinTech companies generally have lower operational costs than conventional banks, resulting in lower transaction fees. This makes it much cheaper for users to manage their finances. FinTechs also aim to reach populations less exposed to traditional banking methods, by providing some of the convenient digital services we have discussed. All in all, FinTechs are the future of global finance, and investing in promising ideas now may just lead to your success.
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