Financial technology, or FinTech, is truly reshaping the landscape of the financial industry. Innovations such as mobile banking apps, crowdfunding, peer-to-peer lending, and bitcoin currency are rapidly changing the world of financial services as we know it. According to Freedom Financial, there are several reasons that this revolutionary concept has taken off to the extent that it has. It is part of the aftermath of a global financial crisis, the numerous recent technological innovations, and heavy investing in FinTech.
The Financial Crisis of 2008 Opens the Door for FinTech
In late 2007 and 2008, the world experienced a major global financial crisis. Many companies in the industry were caught completely off guard by it. In fact, numerous banks were penalized with massive fines – to the tune of $321 billion. These banks were held responsible for much of the crisis and they paid heavily for it.
New legislation and reforms were put into place to better regulate the banks. And these banks went into survival mode. However, according to Freedom Financial, while the big banks were struggling to regroup, other companies and entrepreneurs saw an opportunity.
Technological Advancements and FinTech
As the banks were struggling to stay above water, new and exciting technological advancements were (and still are) taking place. In 2007, Apple revealed the first iPhone. In 2009, financial services and mobile payment company, Square was started, allowing people to accept credit card payments on a smartphone or tablet. Uber, the car transportation service that allows you to book and pay for your ride all from your smartphone, also began that same year. Airbnb was founded in 2008 and by 2013 had over 250,000 properties available. And over time, Amazon became the world’s largest retailer despite having virtually no physical stores.
With banks undergoing major changes and technology rapidly changing, Freedom Financial believes this was the perfect storm for creating the FinTech revolution.
Investing in FinTech
Many investors recognized the opportunity that was created in this storm and began investing heavily in FinTech services and companies. According to Freedom Financial, FinTech growth continues to be fueled significantly by investors. Last year alone, global investment in FinTech was $17.4 billion. This was up from $12 billion in 2014, a jump of 11 percent. With numbers like this, the industry shows no signs of slowing down anytime soon.
FinTech is truly taking the world by storm. Not only are new companies springing up all of the time that offer FinTech services, the banks have even jumped on board. Most large banks now offer services like Zelle pay (a peer-to-peer payment service) and mobile banking apps that allow you to check your balance, pay bills, and even deposit checks from your smartphone.
Freedom Financial and FinTech
Freedom Financial utilizes the tools and the benefits of FinTech services for our customers. Yet, we also recognize the value of speaking with a live person at times. That is why we offer a combination of online services with the ability to speak to a certified counselor about your financial questions. Our unique, customer service-oriented approach allows us to personalize your experience to your specific financial needs.
For more information about our services, contact us online.