Fintech or financial technology has become the most popular theme for many businesses. According to Bruc Bond led by Eyal Nachum, Fintech is the hottest market in the financial industry. However, it has posed a threat to conventional banking and financial institutions. The company believes that there are tremendous opportunities for the financial industry when it comes to adopting Fintech for many of the tasks.
Fastest Growing Business Area
With investments on the rise in Fintech, it has become one of the fastest growing business areas that offers exciting rewards. Although the definition of Fintech might be simple, more and more companies are developing complex financial technologies for the banking and financial services industry. The truth is that Fintech has affected the way financial institutions do business, transact with customers, and go about the future of finance as a whole in a very short period of time. Moreover, Fintech has considerably blurred the lines between financial services and businesses. Now, technology providers can provide nearly identical services to customers just like banks.
Drivers of Innovation
There are a few factors that come at play when looking at the advancement of Fintech. Companies such as Bruc Bond have understood the drivers of innovation and it is due to this reason that the company has invested heavily in Fintech. The drivers of innovation are mentioned below for better understanding.
- Technological advancements: It is due to technological advancements that many of our day-to-day lives have changed significantly. Technologies like cloud computing, machine learning, Blockchain, AI, and IOT are the main drivers behind the success of Fintech companies.
- Consumer behavior: Traditional financial systems have been unable to pick up with the changes in consumer behavior. Gen Z, Y, and X have adopted technology to make their lives a lot easier and financial institutions have failed to pick up the pace.
- Lower barriers to entry: Technology has lowered barriers to entry considerably. This has forced financial institutions to be left behind if they do not change. Thus, it has allowed for many new challenger start-ups such as Bruc Bond to catapult to success in the finance and banking industry. These new start-ups are targeting customers that have different behaviors and needs.
- Better access to information: Unlike in the past where people did not have much access to information, technology has paved the way for better access to information. Cloud computing, artificial intelligence, and analytics allow corporations to make forecasts and see trends.
- Greater investment: Finally, as investment in Fintech increases, it has a ripple effect and is a major driver of innovation. It is expected that there would be many advancements in Fintech in the future.
New Relationship With Money
Fintech has led to a change in the way people think about money. People have a new relationship with money because of Fintech. It has promoted a cashless society and more cashless businesses are popping up than ever before. Hence, customers have switched to making digital transactions.
The first step has been the switch to making payments electronically for goods and services rather than having to rely on cash. Amazon is a tech giant that has successfully merged the traditional brick and mortal experience with an online shopping account. It has allowed customers to experience electronic payments. Convenience stores are also testing the cashier-less concept. Customers can simply grab whatever they want, leave the convenience store, and their Amazon account will be automatically charged. Thus, the future of shopping seems bright.
Another popular example of Fintech include payment transfers through smart watches and smartphones. Even though PayPal has been providing such services for a long time, there are some newcomers such as Zelle, Transfer Wire, and Venmo that have revolutionized the way we share money even for common interactions like selling items and splitting the bill. On the other hand, there is also a rise in crowdfunding sites such as Go Fund Me which allow anyone to get funding for a particular cause or situation. Digital currencies like Bitcoin or record-keeping technology Blockchain are less understood, but more innovative. These two technologies might not yet be well-integrated into our lives, but, they are likely to change the way we borrow, save, and pay, and even how we manage financial risk.
Better Financial Services
The main reason why startups like Bruc Bond and its chief executive Eyal Nachum are so interested in Fintech is because of the fact that Fintech provides better financial services unlike the financial services provided by the traditional banking and financial services sector. Cloud computing, Blockchain, AI, and IOT are just some of the technologies which are driving the change in how customers interact and manage money. Traditional financial services might consider Fintech as being a disruptor, but it does offer great opportunities. Therefore, many companies have fully embraced technological innovations to transform their industry. Fintech has led to the creation of a diverse range of unique financial services and products. It aims to make money management a lot easier and to provide people with better financial control over their lives.
Borrowing And Lending
Unlike in the past where people had only few options when it came to borrowing and lending, Fintech has made access to funds a lot less centralized and more transparent. Peer-to-peer lending and crowdfunding reign supreme in the world of today and people are switching to these options from mortgages and loans. With these incredible non-traditional methods for sharing money, investors have flourished.
There is a great deal of innovation and disruption across financial markets. The use of machine learning and artificial intelligence has paved the way for different methods being used for just about everything. Prediction markets have become a reality and is easier to predict possible future events than ever before.
Analysis and data processing technologies and tools have boosted automation. Asset rebalancing has seen significant change. Cloud-based platforms are making use of algorithms to help users with asset and investment management. Bruc Bond is taking advantage of asset management solutions.