With the growth of technology, many countries have become nearly cashless societies, relying on the tools of financial wizards. But what is fintech? A fintech company is a business that provides financial services by making use of software and modern technology, according to Fintech Weekly.
The world of fintech is changing U.S. lifestyles and some areas have experienced dramatic change in the last 10 years because of it. Learn how fintech already has or might change the way you handle your money.
1. Mobile Banking Is Becoming More Popular
Today, many people use online banking for many of their financial needs. Mobile banking and banking technology have also allowed us to make deposits from the convenience of our home, nearly eliminating the need for more traditional banking and financial institutions.
First came robo-advisors, which use computer algorithms to search the investment world to give you the best investment strategies. Now Bank of America is using banking technology to open branches with no tellers — called robo-banks — that enable customers to video chat with a banker if they need to discuss any complicated issues.
2. Fintech Startups Are on the Rise
The number of fintech startups has grown significantly. In fact, PayPal has completely disrupted the financial sector because it holds more money than all but 20 U.S. banks, according to The Wall Street Journal.
PayPal initially offered consumers a way to implement personal payment processing and has expanded its products to include software that enables businesses to conduct e-commerce processing directly on its website. PayPal Payments Pro provides the flexibility and payment processing security to build a professional e-commerce site. You can configure it in any way that works for your business needs, and you can tap into more than 184 million active customer accounts around the globe.
3. Value-Added Banking Is Growing
Today, banks offer tailored services for their customers. For example, Chase offers private banking services that include complimentary financial services for high net worth clients. VIP banking services vary among banks and might include stock and portfolio analysis, reduced interest rates on loans and no-fee ATM withdrawals.
4. Peer-to-Peer Lending Offers Loan Alternatives
Peer-to-peer lending companies are growing in popularity in the fintech sector. You might have read about peer-to-peer lending in recent tech news — it allows individuals and consumers to circumvent the banking industry by borrowing money from private investors. Borrowers can use funds to help pay off their credit cards, student loans and car payments — or even as capital to start a new business venture.
5. Crowdfunding Offers a Quick Way to Raise Money
Crowdfunding is an inventive way to raise small amounts of money through a large number of individuals to start a new business. Crowdfunding websites provide a forum for anyone with an idea to pitch to investors looking for the next big thing. Some popular crowdfunding companies include Kickstarter, GoFundMe, Indiegogo and 40Billion. People have raised money for everything from board games to chef’s knives to medical funds using crowdfunding.
6. You Can Pay With Bitcoin
Bitcoin is a type of cryptocurrency that allows individuals and consumers to make and accept payments for goods and services. Bitcoin has had issues since its introduction and its prices are volatile, but it’s still growing in the fintech sector.
Several major companies facilitate Bitcoin exchange, including Expedia, Microsoft, Tesla, Dell, Home Depot, Kmart and Sears. Because of Bitcoin’s volatility, several of these companies have worked with third party vendors to accept payment and immediately liquidate it into U.S. dollars.
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