The technological advancements in the 21st century have made our lives easier with almost everything available online. The advent of Fintech has positively changed the world with various products and services available just a click away.
Fintech has led to the emergence of new business models by making traditional banking operations almost obsolete. It radically transforms the functioning of various banking operations by using innovative ways. As a result, new services and products are available very easily to customers without having to rush to the bank.
Over the years new Fintech start-ups have developed, offering specialized services at cheaper rates than traditional banks. So the banking institutions were forced to adapt to the changing financial world by utilizing Fintech solutions in their business operations.
Fintech plays an equally significant role in the technological advancement of the retail banking industry. Let’s talk about the two major advantages of Fintech in the retail banking industry-
- Increased Financial Inclusion: Fintech has increased the accessibility of financial services for the common man. Earlier only wealthy individuals or people with a high financial stature could avail of retail banking services. Fortunately, with the coming of Fintech, even the middle-income group of society can easily avail of several financial services.
For instance, in the investment field earlier a particular was available to take investment advice. With Fintech, the field of investment has become accessible to everyone in society.
Similarly, in the case of lending, many deserving individuals were denied loans due to a lack of data sources. Fintech has made loans available to a wider public with its ability to assess risks using different sources of information.
The revolutionary innovation of Fintech has enabled individuals of varied financial stature to afford and avail of basic financial services.
- Provision of Efficient and Cheaper Financial Services: The fintech revolution has provided people with the online availability of financial services without visiting actual banks. Before the development of Fintech, banks had restricted banking systems in settling financial transactions without physical presence.
One good example of such restrictions is the geographical barrier people faced to avail of various banking services. There is still a large number of people who need to visit banks to fulfill their financial needs.
The innovation of Fintech has given people the opportunity to avail of Fintech services through mobile apps and digital wallets, peer-to-peer transfer, etc.
The advantage of using online banking services is that they are easy to access from mobile phones. These mobile apps utilize digitized versions of debit and credit cards to carry out various transactions.
With the help of digital wallets, users can transfer money to any other user without any hassle. Fintech has enabled the association between bank accounts and mobile payment apps that make transactions easier for businesses and clients.
The fintech companies operate such transfers at cheaper rates than traditional banking services providers.
Although constantly growing, Fintech comes with various risks along with the several advantages discussed above. As Fintech gradually paves the way into the conventional banking systems, many government agencies have formulated rules and regulations to control certain risks.
After adopting Fintech solutions, the retail banking industry should learn to use the right tools and regulatory policies to avoid the risks associated.
Be a part of the next global FiNext Conference to learn more about it.