FinTech, short for Financial Technology is quickly shaping the financial industry through innovation and technology. This multi-billion Rand industry is redefining everyday financial activities such as payments, eCommerce and banking.
FinTech companies consist of startups, established financial institutions and technology companies who are trying to replace or enhance the current financial services and products provided by existing financial institutions.
By replacing or enhancing the current financial services and products provided by existing financial institutions, FinTech can revolutionize the way that payments are processed, as well as how individuals and companies interact with banking services and products.
Uses cases for FinTech include loans, crowdfunding, insurance, mobile payments, banking, money management, cryptocurrency or any sector that involves the transferring of money.
FinTech is not something new, it has been around for over a decade. The term “FinTech” has been popularised through advancements in technology and innovation. The sectors to influence FinTech the most in the future include; artificial intelligence, big data, blockchain and cryptocurrency.
Robinhood, a pioneer of commission-free investing, is a great example of FinTech. Robinhood allows users to make unlimited commission-free trades in stocks, funds, options and cryptocurrency.
FinTech has also played a large role in more banks choosing to go digital. TymeBank is one of South Africa’s only fully digital banks and offers no monthly fees, free day-to-day banking transactions, and low charges for other transactions.
Standard Bank, one of South Africa’s largest banks has begun implementing its plan to go digital, and according to BusinessTech, Standard Bank plans to cut around 1,200 jobs and close 91 branches as part of efforts to digitize its retail and business bank.
FinTech will surely play a big role in the digital transformation of the financial sector both locally, and internationally while creating jobs and new business opportunities.