FinTech, short for financial technology, is booming. It includes all online innovative financial products and services that are revolutionizing the way we handle our money. This disruptive technology changed the way all types of business entities operate and even the way we manage our personal finances. As an example, nowadays you can pay with your mobile phone, invest with just one click and anonymously transfer money across the entire world.
Characteristic for FinTech is that the development of FinTech mostly takes place outside the established financial institutions such as banks. This may be mostly caused by the fact that, over the past few decades there was a lot of general distrust and loss of confidence in our traditional banking system.
Currently there is an explosive growth in FinTech start-ups and they are accelerating change rapidly. Banks are already expecting to lose 23 percent of their revenue, while the FinTech companies are aiming at 33 percent of the market. The most popular areas for FinTech are payment and loans, security and cloud-based services. However, its applications are wide spread in the financial world.
An excellent example of a fast growing FinTech is the Dutch company Adyen. Ayden represents the core principles of a bank, supporting financial transactions. Adyen reflects this by facilitating almost all forms of online payment. With the support for over 250 payment methods and more than 150 currencies, it is no surprise that Adyen won the FinTech Company of the year 2015.
FinTech has changed the way companies do business. For example, where new businesses had to turn directly to their local banks or look for a conventional investor, now FinTech takes over. Entrepreneurs can now choose from crowdsourcing to mobile payments. Every single person with a new idea is now able to pitch this directly to the world and get funding from people they have never met.
FinTech has a very positive outlook according to many experts, but what do you think will happen in the next couple of years?
Nice! Some more Fintech posts 🙂 Be sure to also check out: https://digitalstrategy.rsm.nl//2016/09/24/best-fx-rate-when-traveling-abroad/
You’re talking about Adyen representing the core principles of a bank: technically it is not like that. Adyen is as a payment provider an easy way to accept virtually every payment method there is. So an online clothing store is able to accept over 250 payment methods (e.g. creditcards, iDEAL (NL), Bancontact (BE), Giropay (DE), etc) without going through the hassle of implementing it all by them selves. They collect the money for you and transfer it into your bankaccount at a small fee.
Fintech can also happen within banks. One of the most prominent banks that embraced Fintech is the Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA). Within a couple of years they changed from bank for old people, to a first class innovator in their industry. They are participating in Atom Bank (UK, app based retail bank), and own Holvi (DK, bank targetting SMB’s) and Simple (US, app based retail bank).
https://www.adyen.com/payment-methods
http://www.prnewswire.com/news-releases/simple-joins-bbva-to-transform-banking-industry-246350361.html
https://www.bbva.com/en/news/general/bbva-acquires-finnish-banking-start-holvi/
https://www.bbva.com/es/noticias/economia/computacion/transformacion-digital/bbva-entra-capital-atom-bank-primer-banco-exclusivamente-movil-reino-unido/
Yes, this is the transition from using normal bills and coins to having apps / systems that manage all transactions. The Netherlands is maybe one of the most advanced countries in terms of FinTech, both B2B and B2C. Many other developed countries like Germany or France lack behind. But slowly they’ll get to the Dutch level.
However, what I am mostly interested in how these cryptocurrencies will impact the world. Would they be able to change how the payment system works? Would money as we know it know disappear? Are companies like OneCoin the future or just global scams?