7 Reasons FinTech is Becoming the Need of the Hour

There is finance and then there is technology. When both of these come together, they form what we call FinTech. Fintech is a 21st-century term used to describe new technology that seeks to improve and automate the delivery and use of financial services. It Is used to assist companies, businesses, consumers and owners in better managing their financial operations and lives by using specialized software and algorithms on digital devices.

Over the years, Fintech has moved from just being a back-end organization-centric tool to being a customer-centric service tool. Fintech now includes different sectors such as cryptocurrency, education, retail banking, fundraising and nonprofits, investment management and more.

As per fortunly, fintech companies acquired $25.6 billion in investment in the first half of 2021. Almost 88% of incumbent financial institutions believe that part of their business will be lost to standalone fintech companies in the next five years. This shows the readiness in the market to accept more FinTech services. To be able to be numero uno in the market, organizations are spending heavily on fintech app development services. There has also been an increase in the demand to hire fintech developers.

Different Types of FinTech Services

By 2020, almost 64% of consumers worldwide have used some or other kind of FinTech service. Here are a few of the most popular FinTech categories used worldwide:

• Money Transfer a Payment: This category mostly involves peer-to-peer money transfers, in-store mobile payments, and phone/UPI money transfers. Some of the most successful services in this category are PayPal, GooglePay, etc. This category has created a huge demand for fintech mobile app development.
• Savings and Investment: This category saw the most rise during the lockdown crises when people wanted an alternate source to increase their income. As a result of supreme fintech application development initiatives, many investment applications such as Upstock, Revoult, Smallcase, etc have shaken the market already.
• Insurtech: Many fintech app development enterprises have made great strides in the insurance sector. Insurtech has streamlined and simplified the insurance process and, thus, helped the industry to become more customer-centric in its approach.

Reasons Why FinTech is the Need of the Hour

1. Banking Sector:

The need for the customer to visit a physical branch is slowly reducing. The low-value interactions at the branch are reducing steadily. Clients are not going to the branch for basic questions but rather just for critical decision making like investments. This has been made possible by advancements in application development by fintech app developers. Clients no more see a bank’s value in financial services, rather they derive that from the mobile application and the services therein.

2. Investment Advice:

• One of the fine gifts by fintech app developers are the investment and savings application and websites. There has been a rise in the number of AI-based robo-advisors that use algorithms-based investment guidance systems. In many cases robo-advisors have proven to be more successful in comparison with humans in steering consumers towards long-term plans rather than low-risk short term plans.

3. Small Businesses:

• FinTech has played an important role for small businesses by making it easier to fetch loans, and manage payroll professionally, and payments. Payments and business services were one of the first few areas of finance that positively impacted such entrepreneurs. All credit to fintech app development companies that brought technologies that touched small shops and businesses in a way that helped them increase profits. For instance, the secure electronic transmission of money with UPI and QR codes helps to avoid the hardware and transaction fees required by major credit card companies.
• Fintech has helped small businesses in areas where traditional financial institutions were scared to step in due to perceived high risk.

4. Apartment Rental:

• In some parts of the world such as New York, landlords ask for income to be higher than the rent as a precondition to renting the house. FinTech has incredibly reduced this gap. Services like TheGuarantors have made renting easy. In cases where the renter has no guarantor, the Guarantors fill in as co-sign for the apartment by issuing the landlord a bond backed by an insurance company.
• Every fintech app development company is working on related models to help renters all around the world. This establishes well the scope of FinTech in real estate as a whole.

5. Payment Service:

• In many economies like India, the chance improvements in technology, coupled with growing demand for easy banking and payment services, gave rise to digital payment methods to raise, subsequently changing the way India pays. In India, both banking and non-banking institutions offer various payment services. There are numerous successful fintech development companies in India that have become Unicorns in recent years.

6. Economic Equity and Access:

• Financial services have only been accessible to a select few around the globe. FinTech has helped to create opportunities for those to whom it has traditionally been unavailable. Some of the best Fintech app developers are challenging traditional financial institutions standing in the way of social equity by reaching out to non-traditional customers. The elimination of gatekeepers brings opportunities for addressing long-standing equity and access challenges.

7. Currency:

• There is a possibility that a fintech application development company may change the very concept of money. Cash already seems to be becoming obsolete day by day and in fact, major currencies such as the dollar are already being challenged by digital platforms- thanks to blockchain technology. Blockchain technology has allowed for the reliable use of cryptocurrencies which work in the space of decentralized electronic exchange of value.

Conclusion

By now we understand that FinTech has had a huge impact on how we used to conduct financial transactions. It has played a major role in breaking many access barriers created by traditional institutions. The advancement in digital technology and platforms coupled with the spread of the internet in the deepest corners of the globe has brought financial decision making into the palm of the hands of the consumers. Therefore, a software development company can create FinTech solutions that digitally transform the financial operations of organizations.

Fintech application development enterprises have played a key role here. They have used python agile development. Python seems to be the top language of choice for FinTech developers. While Java and C++ follow, no matter the programming language, the FinTech industry is determined to change the way we perceive finance.