At the moment, there are approximately 16,000 fintech companies in the world. This figure is growing every day. The leaders in the world ranking with the largest number of financial technologies on the planet are the United States and Great Britain.
Such popularity of this sector is due to the fact that fintech applications are very diverse. With them, you can make mobile payments, manage your budget, use cryptocurrency, and so on. The concept of fintech has been a major turning point in the renewal and innovation of the financial sector. In this article, we will tell you more about digital transformation in the world of finance.
What does a fintech application mean?
Fintech applications are intensively developing financial services using new technologies, redefining a new way of understanding banking services. In fact, the word “fintech” comes from a combination of the English terms “finance” + “technology”. Their main goal is to provide their users with the ability to manage their finances and make any payments or transactions instantly. And when compared with traditional banks, fintech developments are definitely in the lead.
When developing such products, fintech app development services will help you. These are professionals in their field who specialize in the creation and development of fintech applications. To do this, they use different technologies and tools.
Fintech sector today
The fintech application industry can be divided into two main sectors: fintech not associated with financial institutions and fintech created by financial institutions.
The first group of fintech applications includes original applications created by entrepreneurs who are not associated with large financial institutions. The purpose of these applications is to facilitate the process of money transfers or other banking services. The main examples are:
- crowdfunding;
- investment platforms in startups;
- blockchain;
- currency exchange;
- loans between individuals.
Fintech created by financial institutions
The second group of fintech applications includes mobile banking applications that were created by large financial institutions in response to the challenge of high-tech applications:
- control of bank accounts;
- online financial manager;
- mobile payment.
So far, the first group has contributed the most to innovation through smaller, more agile organizations. Large financial companies and banks have not only realized that mobility is the future of finance and copied some fintech solutions, but also started investing in some startups. They are interested in startups that create tools for other companies to use in creating financial products, but not the final product itself.
What do fintech applications represent in the global financial market?
In fact, fintech companies greatly influence the revenues of traditional financial enterprises. Most structures understand this, so they try to adapt to this and sign agreements with fintech enterprises.
Why do many people choose fintech? The main reasons for this collaboration are the flexibility with which fintechs adopt new technologies and test new business models, proximity to current and future customers, and efficiency. Despite the fact that new developments, customers are attracted by the simplicity of such developments. In just a few clicks, by following a simple algorithm of actions, you can complete a financial transaction.
On the other hand, traditional companies instill more confidence in users and potential customers. In addition, they offer customer support. The key point is the knowledge and experience of traditional banks in processing financial data.
This collaborative trend makes a lot of sense given the digitalization we are experiencing: customers are looking for a more digital, simple and transparent way to contract their financial products that is fresher, more flexible and simpler. Thus, a new technology, fintech applications, is designed to compete with traditional financial methods of providing financial services.
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