The importance of fintech in the future of finance
Navigating the banking and finance industries is not an easy task. While the financial industries themselves are considered somewhat traditional sectors, they are in fact constantly evolving. One key area of expansion is that of financial technologies, or ‘fintech’ as it is better known. But what is fintech, and how will it change the future of finance?
Like many professionals, you may be asking the same questions and be wondering how fintech could play a part in shaping your future. Fintech harbours an abundance of new emerging sub-sectors and there are so many buzzwords you will have heard used: cryptocurrency, bitcoin, blockchain, machine learning and AI to name a few.
What is fintech?
According to Business Student, fintech is the evolving intersection of technology and financial services. Many start-ups are operating in the financial technologies space, and larger financial institutions are starting to realise the importance of leveraging new technology to create new and improved financial services for consumers and businesses.
“Nearly 82% of financial institutions plan to increase fintech partnerships in the next three to five years”
– PWC –
Fintech can be advantageous for all sorts of companies, including those that operate in insurance, banking, asset management and personal finance management.
Fintech also describes a variety of financial activities: money transfers, depositing cheques with a smartphone, bypassing a bank branch to apply for credit, raising money for a business start-up, or managing your investments, generally without the assistance of a person.
Financial businesses are beginning to look for people who have knowledge of these niches within fintech, so studying a course, such as our MSc Finance and Strategy online course, with financial technologies embedded within it can help you stay relevant for the future of finance.
How does Fintech impact industry?
1. Reinvention of customer service
Fintech is focused on merging digital trends with customer expectations. For example, a seamless customer experience has been created by allowing customers to access their bank online – saving them time, travelling costs and the inconvenience. This has meant for the first time in history, those previously unable to access a bank are now able to as the online services avoids physical transit to a bank. According to McKinsey, there are currently more than 2 billion people worldwide who are completely unbanked.
Rapid transformation in the financial sector has heightened the pace of business model innovation. Any business operating using financial technologies is required to be flexible to the ever-changing trends in order to meet customer demands and remain competitive. For example, the use of AI on mobile banking apps will get more advanced over time, and businesses offering these services must keep up with trends to best serve the customer.
3. Cyber crime
The fintech world operates on digital and cloud-based technologies; whilst these improve customer service and increase the speed of processes, they are vulnerable to cybercrime.
According to IBM, financial institutions are 65% more likely to be victim to cyberattacks than any other type of business. With an increasing number of individuals and businesses relying on technology to operate successfully, especially in fintech to optimise customer experience and ensure swift transactions, cybercrime is rising.
4. Smart solutions
The increasing demand paired with the lack of time has forced the banking industry to look for quick, robust and flexible solutions to problems faced or internal inefficiencies. Fintech has enabled banks to develop highly effective solutions to areas of work, that might have been previously neglected in terms of offerings. This shapes both internal processes for financial institutions and store experiences for customers. For example, the implementation of online loans can now all be done through an automated service, rather than having to book a face-to-face appointment in a branch. This makes internal processes much more efficient, giving employees time to focus on tasks that cannot be automated.
How can I learn more about fintech?
One thing is for certain: the fintech industry is thriving. Innovation continues to transform the industry and will continue to do so for many years to come. The growth of the industry is placing an increasing demand on job roles specialising in these areas, meaning that more and more businesses are seeking professionals with an understanding of these exciting new areas.
Our MSc Finance and Strategy online course includes a module on Financial Technologies which will give you a strong understanding of the above mentioned fintech specialisms and the most promising applications that are emerging within the sector. Our module allows you to critically examine the impact of these technologies and their potential impact on the future of the banking and finance industries.
Overall, our course offers future senior managers a crucial understanding of these challenges. It will give you the global perspective you need to take advantage of new opportunities within the fintech industry and is suitable for those both with and without existing professional financial qualifications.
If you’re interested in learning more about our MSc Finance and Strategy online course and how it can help you advance your career, discover more today.