Fintech has developed rapidly in the recent years, driven by technological improvement, changing customer expectations, availability of funding, and developing support from management and regulators. This description considers the value of fintech created for individuals, small enterprises, and the society.
Fintech is drawing attention because of the significant amounts being invested in the sector. In the first half of this year, global fintech investments reached a record of $57 billion, and the UK brought more of that investment ($16 billion) than the U.S. or the rest of Europe. How such investment changes to actual returns is unexplained, but big money is on the global success of fintech.
Fintechs enhance the performance of financial services firms and support them provide products and services more effectively, recognizing five principal issues—enhancing financial inclusion, improving customer experience, developing transparency, improving security and compliance, and providing maintenance and supervision.
Students with diverse educational backgrounds today are considering the financial technology as a career option today due to the various career paths in fintech without the need for a background in finance or technology. Also, they can work in many sub-sectors from insurance and investment to wealth management and administration. A successful fintech business requires everyone from operations managers and customer assistance teams to salespeople and marketers like any other business.
The focus of fintechs will gradually move beyond customer experience improvement and distribution, to more innovative products. Meanwhile, growing pressure on traditional financial institutions to reduce their cost base will drive more investment into fintechs that focus on middle and back offices. Financial services institutions with more manual, complex, and out-dated systems and B2B offerings will benefit from fintech innovations using AI, robotics, the blockchain, data analytics, and cloud services.
To respond to the rapid technological evolution and mounting pressure from changing customers needs, a strategy focused on collaboration may help financial institutions innovate and materialize ideas into outcomes quickly. The industry has come together in the past to bring revolutionary industry-wide solutions, so there is a potential to see larger collaborations. As some of the fintech propositions start to mature, it is likely to see more fintechs becoming an essential part of the ecosystem. In addition, more partnerships will be seen in the areas where mutual benefits can be found: start-ups may offer use of their technology in exchange for access to growth capital, customer base, and critical industry infrastructures.