If you’ve noticed that your bank, credit card provider, and even the nature of commerce in the United States is changing, you’re not alone; the financial technology (usually referred to as simply “fintech”) revolution is taking the market by storm, and shows no signs of slowing down in the coming years. Fintech is simply using technology to deliver financial services to consumers- and Freedom Financial has seen firsthand the massive investments that have lead the fintech revolution. Global investment in fintech was over $17.4 billion, which Freedom Financial estimates is an increase of over 11% when compared to just one year prior; this upward trajectory is what causes financial experts to predict that fintech has no intention of slowing down.
Fintech is changing the way that consumers interact with their currency and make purchases- and you’re probably already using it. From mobile banking apps to online shopping and from digital lending and cryptocurrencies like Bitcoin, you’ve probably adopted some form of fintech into your lifestyle. Freedom Financial believes that this massive and lightning-fast development is the result of an economy that is coming off of the financial crisis of 2008. As traditional financial institutions struggled to recover from an unexpected crash in the market, new advancements in consumer culture and technology were able to gain a foothold and provide for consumers when age-old institutions could not. And while fintech was developing, we’re also in the midst of some of the most exciting changes in the market. Uber, who owns no taxis, is now the largest taxi company in the world. Airbnb, the world’s largest hotel chain, owns no properties. And Amazon.com, who founded their business with no retail outlets, is now one of the world’s largest shops after being founded on technology like automatic credit card processing.
These companies came to prominence during the same period in which the first fintech advancements began to form. In the same way, new technological advancements are coming from novel sources as well- companies like Google and Tesla, not traditional car manufacturers, are leading the way for self-driving cars and cars that run on more electricity than they do gasoline. In the same way, Freedom Financial predicts that you will see a number of new financial companies begin to chip away at the influence held by the financial institutions that consumers have known for years. We anticipate that the shift towards fintech will also have three effects on the current market:
Though consumers are traditionally slow to accept change, it appears that the fintech revolution is here to stay. Though the new advancement of technology comes with a few downsides concerning more and more automation, the free market has determined that the benefits outweigh the cost- for the time being. Only the march of time will tell whether or not businesses adapt to the changing financial landscape and cater to the new needs of their consumers with financial technology.