The financial services sector is in the middle of a massive, overwhelmingly-positive transformation, with changes so impactful that they resonate on a historic level. Is it driving force? Financial technology, also known as fintech. Companies are increasingly using technology to deliver new-look financial services – banking apps, peer-to-peer lending, crowdfunding, and blockchain-based cryptocurrencies – that are bypassing traditional infrastructure and reshaping the financial sector in major ways. Global fintech investment has continued its steady, upwards trajectory over the past half-decade, signaling future prosperity to come. So why is the fintech revolution happening now? And is it here to stay?
Lessons from 2007-2008
2007-2008’s devastating financial crisis caught traditional companies by surprise. New regulations imposed after the dust settled meant energy and resources were spent adapting to sanctions and updating existing structures to fit the new landscape. Innovation was an afterthought as companies worked to bring themselves up to speed. New technologies were left behind.
At the same time, technology and software were influencing previously-unseen changes in new sectors – Uber and Lyft with taxis, Airbnb with hotels, Tesla with the first mass produced, luxurious electric vehicle. In each instance, deeply-entrenched institutions were disrupted by technology. Today and moving ahead, fintech firms are poised to take advantage of the lull brought on by the Great Recession to do the same, but this time with banks and financial services companies.
What Changes are We Seeing?
The modern age is about convenience. Clients want personal service, instant access, simplicity, and transparency; the internet, phones, and computers make these things possible for larger amounts of people than ever before. These tools also mean previously-neglected people are no longer denied access to financial services simply because they live in remote areas or are victim of entrenched biases by traditional financial firms.
Fintech is also providing financial advice and education for groups who were formerly underserved – traditional advisory firms are increasingly the province of the wealthy. Now investors just starting out can receive the full benefit of financial advice, via robo-advisors. Algorithms can help an investor diversify a portfolio and rebalance as it grows.
The benefits even extend to businesses; fintech helps companies cut costs, comply with regulations, and improve the client experience, building trust with their customers. From creating online portals where a client can manage their portfolios and even chat with representatives when the need for help arises, to transferring money to family and friends easily through apps – managing financial lives is being made easier by the day with technology.
Rapid growth brings unique challenges. Fintech companies need to learn how to anticipate and address the same shifting compliance targets that precipitated their rise in the first place – or risk the same fate. But even as they work to stay ahead of the curb, fintech is creating a world where more people than ever have access to financial services. The benefits are here, and they cannot be denied.
At its heart, Tickeron is part of the fintech revolution. It has build algorithms that can help investors build diversified portfolios, and it gives retail investors access to Artificial Intelligence to navigate the markets by finding patterns and trends. It is giving sophisticated tools to everyday investors, which is the essence of the fintech revolution. Learn more about the investment tools Tickeron has to offer on tickeron.com.