The growth of fintech cannot have escaped your attention. Whether you’re a customer making contactless payments or an investor weighing up CFD trading strategies, the impact of technology on finance – at all levels – has been significant. The fintech revolution is far from over, too, with big scope for growth in a host of markets – from early adopters such as China, India and Australia through to places such as South Africa and South Korea which have huge potential for greater adoption in the coming years.
Not only is fintech affecting change to customer behaviour and attracting investment, it’s also helping to shape the global nature of the markets.
Disruption and innovation
The disruptive nature of fintech helps us to understand its global reach and appeal. Startups in this field know they have the potential to capitalise on a trend that knows no physical boundaries and can really shoot for the stars with a global audience. Put simply, a neat banking app designed in Brisbane might well prove handy for savers in Texas, Tokyo and Tallinn too and the methods of distribution mean that this can be pushed out to Apple and Android users with relative ease – and low cost.
Low overheads, small scale, modest budgets and geography once all stopped businesses from being able to muscle in on the territory of multi million dollar enterprises but technology has, to some extent, neutralized these factors, paving the way for fintech disruptors.
Blockchain and Bitcoin breaking down borders
A great example of the international scope of fintech comes with the example of cryptocurrencies. Bitcoin in particular, as the largest of these cryptocurrencies, attracted a lot of headlines last year as it shot up from US$1,000 to more than US$19,000 and it – and its fellow digital payment platforms – are a good example of the new order promoted by fintech.
Cryptocurrencies are decentralized and deregulated – operating outside of the traditional system of money which is closely controlled by central banks, governments and cross-border regulators. They allow users to sidestep the fees associated with currency exchange and makes transactions simpler especially in fragmented markets. This is already bearing fruit in Africa, for example, where blockchain based app BitPesa is allowing for smoother transfer and business-to-business payments in the likes of Kenya, Nigeria, Tanzania and Uganda.
Ideas spread like wildfire
While business can transcend boundaries, ideas travel even more freely. Within fintech circles, insuretech – and the ability to provide personalized products by using technology such as telematics – attracted a lot of attention, with start ups in a number of territories developing this.
Digital mortgages are also a product being offered in a number of territories. In Australia, Tic Toc attracted headlines through its instant online home loans while in the US Blend attracted $100 million in funding and entered into partnerships with Wells Fargo and US Bank.
The rapid spread of ideas, decentralized digital technologies and disruptive technology that isn’t constrained by geographical boundaries are helping fintech have a global impact.