A Digital Revolution in the Financial Sector
Financial Technology (FinTech) describes a business that aims to provide financial services by making use of software and modern technology. While FinTech has been part of the global economy for decades, today it references a type of disruptive technology that is shaping the future of world trade.
A number of developments, from automated wealth management services to sophisticated robotic trading platforms, have emerged to provide low-cost, practical alternatives to traditional wealth managers. These solutions cater to a broader customer base and empower individuals to have more control of their own investments and portfolios.
Accenture: The Future of FinTech and Banking: Digitally Disrupted or Reimagined?
“The digital revolution in financial services is under way, but the impact on current banking players is not as well defined. Digital disruption has the potential to shrink the role and relevance of today’s banks, and simultaneously help them create better, faster, cheaper services that make them an even more essential part of everyday life for institutions and individuals. To make the impact positive, banks are acknowledging that they need to shake themselves out of institutional complacency and recognize that merely navigating waves of regulation and waiting for interest rates to rise won’t protect them from obsolescence. This Accenture report brings together the views of 25 influential financial services executives involved in innovation, and maps out the activities that established players have identified as necessary to allow them to disrupt their own business model rather than watch challenger models disintermediate them.”
Forbes: FinTech Investments Quadruple: Top Trends to Watch
“As money becomes increasingly stored as digital data and moves with us on our mobile devices, it will flow fluidly, and at a far lower cost from person to person; from consumer to vendor; and from investor to business… The financial crisis of 2008-2009 was a major inflection point surrounding the level of trust consumers held with brand-name financial institutions. This crisis, and how big banks responded to it, helped open the door for smaller companies to serve businesses and consumers who may not have trusted “startups” in the financial services and technology sector with their money.”
The Financial Brand: Fintech Growth Poised to Disrupt Banking Industry
“The overarching advantage provided by most fintech solutions is the ability to make consumer’s lives easier. By leveraging technology to deliver value and convenience, fintech firms have targeted those services with the most friction in the delivery process as well as those with the greatest financial margins… Not taking action on the trend toward digitalization is dangerous since the industry’s older customer base is shrinking. According to EY, the “Facebook Generation” will reach peak earning potential within the next ten years. This new breed of customers will demand anytime, anyplace, contextual tailored experiences facilitated by smart devices and ubiquitous internet access. Most banks currently struggle to meet the demands of this digital-first consumer.”
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