With more and more of our lives being handled digitally, it should come as no surprise that our finances be taken care of the same way. Financial technologies (FinTech) has grown into a multi-billion dollar industry, with startups growing at exponential rates each year. Analysts have observed this trend, and many believe that in a brief number of years paper money could be completely phased out. The fluidity of electronic finance reduces costs from customer to vendor, and makes for instantaneous exchange between parties while providing mutual protection.
Born out of the 2008 financial crisis, FinTech startups were an answer to a question that had long been thought insurmountable. How can I best invest my money without relying on the struggling banks? Enterprising entrepreneurs took notice of this, and began developing early FinTech platforms that combined emergent technologies with their financial know-how.
Fast-forward seven years and we’re emerging from the post-financial crisis dust cloud. FinTech has exploded, growing alongside technology at a tremendous rate. In one year, social media’s integration with FinTech grew by four times, and the climb is expected to continue its exponential leaps.
The advent of new financial technologies forced industry dinosaurs to adapt or face extinction. Older firms like Vanguard and Schwab developed what they call robo-advisors to assist customers online and on their mobile devices. Citibank, a giant in the banking world, began rolling out their own cryptocurrency. After the meteoric rise of Bitcoin, Citicoins are Citibank’s attempt at gripping the coattails of the emergent currency.
The elimination of brick-and-mortar banking has forever altered the face of traditional lending. Without the cost of maintaining a physical chain or an employee payroll, the savings are immediately passed on to customers. The reduction in cost allows customers to easily acquire credit lines, and keep the interest rates down by eliminating overhead costs. The strangest phenomenon brought on by the evolution of FinTech is cryptocurrency, and its acceptance in the mainstream economy. From boutiques to restaurants, Bitcoin is accepted alongside any dollar.
There is no telling where the future of FinTech is going. So many of our everyday hurdles have been streamlined by the introduction of modern technology, it’s difficult to imagine what’s next. With many FinTech developments designed for mobile use, the future of finance is literally in our hands.