There is a revolution brewing, and the delivery of financial services is where all the action is at—this rocking change comes in the face of automation (which is touching almost every other industry) and finance is no exception.
Financial technology, known by the buzzword ‘fintech’, is overhauling our traditional banking system in more ways than one and, by extension, making our lives easier. Many of the things you’d need the bank to do are now within arm’s reach, and it begs the question: Where do institutions of old fit in the new world, and just how much is fintech changing banking as we know it?
Digital Banking Gaining Overwhelming Preference
You might have heard it, but now it’s becoming more and more of a reality—The days of queueing up at the bank are long gone! A hot take, but it couldn’t be truer. Today, digital and mobile banking (by extension) is bringing “all the banking” you’d need to your fingertips.
You can do virtually anything on mobile banking apps that traditionally would need you to go to the bank. What’s more, it comes integrated with AI that learns your habits and automates everything right down to your saving plan! Revolut, Starling, and Monzo are some of the mobile banking apps pioneering this field in the UK. And it comes with the added benefits of biometric security, voice payments, and more.
The Gamification of Finance
All these benefits and more are bundled into a fun user interface with lots of colors and pictures, making budgeting more interesting. Some apps are even borrowing from the online gaming sector, incorporating elements of fun and competition, like those you’d get in games like Paddy Power’s Crazy Time, to encourage users to return to their apps. For example, you get to spin the wheel in a daily engagement strategy that sees you win rewards like gift vouchers. These gamification methods are applied to the financial services for customers to receive more enjoyable consumer experience.
Peer-to-Peer Lending Making it Easier to Borrow
You’d not be mistaken to presume borrowing and lending to be a preserve of traditional banking; after all, the bank has always kept our money and given it out as loans to make its profit in interest. However, peer-to-peer lending is flipping the rule book as we know it, cutting out the middleman, which in this case is the bank!
With peer-to-peer lending, willing lenders and borrowers can connect directly, making it even easier to access funds. For lack of better words, the whole landscape of lending and borrowing is becoming more democratized, benefiting both parties.
Robo Advisors Helping Us Get Smarter With Our Money
With investing being just as important as keeping your money safe, robo-advisors have taken the role of what would be the expertise of Wall Street suits and financial gurus. Before, you had to consider every little aspect of your investment decisions yourself or get a professional. But with robo-advisors, the process is automated.
Nutmeg, Moneyfarm, and Vanguard Personal Advisor Services are some of the robo-advisors that will pick an investment portfolio tailored to your needs. Their ability to collect statistics and crunch the numbers via complex algorithms gives them an edge over traditional options.
What’s Next? The Fintech Revolution is Just Picking Pace
The future of fintech lies in financial services tailored to individual needs. And we’re already heading there! AI-driven finance services crunch the numbers for smarter investments. Decentralized finance (DeFi) platforms will only become more prominent, with blockchain integration being the way to go for secure-transparent transactions.
