FinTech companies, known to many as Financial Technology, have significantly increased their presence in society over the last 7 years, with their consolidation as a business model and general consumer acceptance. Of this period of time, the last two years have been particularly noteworthy, where global circumstances have led to the use of technology to reduce physical contact. This has been a truly significant boost to the possibilities and widespread awareness of this type of electronic services. But there are many other reasons behind the boom.
The innovation factor
The truth is that FinTechs were born to take advantage of technological advances by applying them to the finance sector to improve and automate many of its processes, but far from remaining just as another digitisation of services, as other traditional entities have done, these companies have wanted to endow their environments with innovation, either through the possibility of accessing new options or by adapting their operations more efficiently to make use of existing options.
FinTech companies operate in different areas of finance, such as payment methods (electronic payments are one of the fastest growing areas), access to financing (where new formulas such as crowdfunding have burst onto the scene), financial advice, fund management and investment, among others. But their digital environments has managed to connect much better with customers, creating a much stronger bond that translates into loyalty; innovation in aspects such as communication with the user or the search for alternative and innovative formulas have had a lot to do with this.
Change of habits
Consumers have changed their habits over the last 20 years, which is approximately when the process of digitalisation in finance began. Now, with the power of the internet, they want to play a much more active role and take a leading role in their decisions. You consult information sources and look for available options. If you want to invest in forex, you compare different brokers to find forex promotions; if you want digital banking, you study their fees. And so on with many of the areas and possibilities of finance.
The information at your fingertips, which you can consult independently, has grown exponentially in recent years. The consumer can find various portals where the available options are compared, such as forex broker reviews or rankings of the best online banks, for example. Also, the way to start using FinTech services and the possibility to switch is much quicker than with traditional institutions. And this is much more in line with current tastes and trends.
Massive use of Smartphones
The mobile device has long since become the main tool for people because of its convenience and because the technological advances of the last decades have been focused on its evolution. Today, these electronic elements are behind many of the actions that every user performs during the day. The world of finance is, of course, well represented in the world of the smartphone; and it is increasingly so, as FinTech companies have taken it very seriously to adapt their environment to that of the mobile device par excellence.
The figures speak for themselves. For example, 84% of UK consumers use a FinTech to manage their money. The accessibility of the service via the smartphone makes these digital services so popular, mainly because of the time savings and because they perceive greater control over their finances. In other countries, such as Spain, 65% of professionals already use a FinTech for banking services; and 70% believe that the expansion of these companies is unstoppable. This is a global phenomenon and the perception is that this global and more technologically advanced society increasingly sees FinTech as a service provider that is more in line with its current needs.
