Technology is something that is ever-changing, ever-helping and seeping into everything. The latest example of such an innovation is the Fintech industry. Incumbents are flocking towards these services that are and will help boost revenues of companies, which has seen an investment of over 19 billion USD worldwide in 2015 and has already crossed 15 billion by mid-August 2016.
A little backgrounder here. Financial Technology also known as Fintech is a group of companies that have come together to provide the right tools and metrics to office bearers. Why? To disrupt the market of existing financial institutions by delivering new methods of financial services using technology. It is more convenient and is very easy to integrate into any company (new or old) to gain immediate boost. While the West has already seen great effects of Fintech, Asia and Africa are slowly waking up to this form of helping revenue. Mobile payments, wealth management and SME lending are just few of the forms of Fintech’s one can use to help their business.
Fintech Favoured So Much
There are several reasons why decision makers are assembling towards the Fintech rocket ship. Saving costs is one of them and seems to be a major reason.
In today’s day and age all businesses are looking to save costs and use new tools to boost profits. Establishments who have patterned with Fintech have managed to save costs, which they were not able to otherwise. The savings come from the efficiencies Fintech’s bring to legacy processes, spending less on customer services et al. as per a recent survey done by global law firm Mayer Brown on Fintech partnerships in UK. Over 87% respondents said they have managed to cut costs by working with these new-age financial services.
Another reason why Fintech is preferred because it increases revenue. That goes without saying as you reduce costs, revenues and profits increase. Moreover, the time spent on acquiring a customer and costs
involved in that acquisition also becomes less. This has benefited a lot of industry leaders over the last two years and they now see Fintech as part of their daily running’s and annual plans.
Then there is the case of giving the brand an edge. Fintech brings a new approach and it gives the companies fresh method to acquire new customers with innovative methods and easy facilities. Companies can now engage customers with advanced products and services at a much faster pace than they could have while building the same on their own.
The adoption rate of Fintech services among customers is increasing too, especially in the emerging markets. Per world Fintech Report (WFTR) by Capegemini, over 75% of users in China and India are using these services regularly followed by UAE and Hong Kong. As much as 17% of this base uses Fintech facilities solely over any traditional method. Over 27% adopters are using Fintech services along with other methods of transactions as per the WFTR report.