Why Is the Global Fintech Market Gaining So Much Popularity?

Posted by Andrew Thomas on May 28th, 2019

The financial industry is going through significant changes. Mobile apps now allow consumers to pay for purchases, transfer money, deposit and withdraw funds and get loans. This can be done at a blink of an eye with the fintech bloom. From credit cards to e-commerce, all are the efforts made by IT companies to establish the fintech infrastructure.

According to research by a leading market research company, the global fintech market, which will pin its worth at approximately USD 305.7 Bn by 2023, expanding at a CAGR of 22.17% during the 2018-2023 period.

What makes fintech successful for clients and institutions?

1.      Innovativeness: it will take a while for banks and other traditional financial institutions to renounce their stable and middle of the road approach, however, many new age start-ups continue to deliver unconventional, out of the box solutions. Their proposals are customized and tailored to suit specific client needs. They aim to develop the best systems at a low cost and within a short period of time. Moreover, they are not only innovative when it comes to using technology, but also deploy forward-thinking business models. While some of these innovations such as mobile apps and websites raise a number for security concerns, their popularity can hardly be questioned.

2.      Customer-centric approach: the traditional financial system lacks convenience, simplicity and optimal user experience. Fintech projects, on the other hand,aims to make financial transactions easier and more comprehensive for users who are not adept in financial jargon. They follow the cutting-edge trends in UI/UX, aimed at engaging users.

3.      Simplicity: This factor is driven by the need to help consumers avail for all fintech services with ease. The global fintech market seeks optimal ways to address customer problems. Easy to operate and intuitive products that use a combination of high technologies, sophisticated approach, and advanced business models. Simple and clear solutions draw greater customer attraction and increase their level of trust and satisfaction with the service provider.

4.      Lack of legislation: though there are no strict rules for fintech innovators to enter or leave the industry, they tend to use the asset-light business model. This model is for financial safety and security and requires constant maintenance. The asset-light model allows firms to increase their value by using fewer resources, in comparison to their scope of activity. Newer projects can be kick-started in a cost-effective quicker manner. Start-ups have taken notice of the new set of business registrations imposed by regulators and are trying their best to get their business licensed.

5.      Financial assistance: with a number of fintech companies appearing each year, dealing with finances has become easier. Today there is no need to spend money on buying and installing complex software. Today’s business owners can take advantage of constantly updated information to make informed decisions and develop strong marketing campaigns. This factors help corporations get more clients and improve the quality of their services. Having vast amounts of information on clients’ buying habits, supply and demand ratio, market prices and competitors’ activity, large corporations can build business models on a fly.