What is Fintech? Why is it revolutionising negotiations?

Financial Technology, or as we now know it FinTech is becoming more popular. But why?

Customers now expect smooth digital negotiations, quick loan approvals and simplified peer-to-peer payments, which are all innovations that have contributed to the soar of the popularity of FinTech as we know it today.

What has made FinTech disruptive?

FinTech has caused disruptions due to the growth of online shopping, leading to the popular solution for transactions that might not necessarily require cash. Banks are also seeking diverse methods other than in-person services to enthuse customers whilst trading platforms that aggregate data, to create a different market perspective, are starting to use analytic tools to unveil trends. Insurance products also had to evolve when it comes to customer-based needs as the specificities of locations, usage and time-frames had to be updated further with insurers having to further collect and analyse client-data. Artificial Intelligence has taken over intricate human activities and traditional financial services organisations have had to partner with marketplace leaders for transaction process improvement.

Following the 2007-2009 financial crisis and the new regulatory changes that took place, financial services sought to integrate technology for better compliance with the new regulatory landscape. In some cases, banks themselves became the technology developers whilst in most situations, the financial services sector found it easier to outsource that technology.

This has led to a revolution of the e-commerce world, which has seen a diversified eco-system of start-up tech providers, financial service suppliers, retail and other industries.

The latest on FinTech

One of the latest warning signs surrounding start-ups is that they might give in to soon to the bitcoin boon. Economists fear that if bitcoin aids the peer-to-peer marketplace, on top of the money made from trading fees and asset-price gains, bitcoin could entice start-ups to sell their products across markets and target a wider audience.

However, without a long-term rise in bitcoin, start-ups may fail to earn a lasting profit. The risks at stake are quite high, both value-wise and on a reputational scale. Since banks are used to paying millions in compensation, what would start-ups do in the case of investor losses in such a high-stake financial environment?