The word ‘fintech’ pops up regularly in conversations centred on innovation, trade, finance and disruptive technologies.
But don’t be fooled, it’s not just a buzzword. According to Accenture investment in fintech increased from $930 million in 2008 to more than $12 billion by early 2015, and is growing by the hour.
What exactly is fintech?
You may have already correctly guessed that fintech is a portmandea for ‘financial technology’. It’s a term that describes the technology used to support banking and financial services. This includes lending, mobile banking, investments and open banking.
The main goal of this industry is to make financial services more readily accessible to businesses and consumers alike. As attention spans shorten, business transactions speed up and everything steadily goes more digital, people want financial services that compliment this, whether they’re attempting to keep track of finances or looking to take out a loan.
The US, UK & Ireland and the rest of Europe are currently at the forefront of fintech investments overall, with China and India closely following.
How is fintech revolutionising the financial industry?
According to EY’s Fintech Adoption Index, one-third of consumers use at least two or more fintech services. We’ve highlighted just some of the activities that have disrupted the world of personal and commercial finance:
Crowdfunding: thanks to crowdfunding, businesses can now raise money in weeks rather than months and thus be able to launch their products and services much quicker than ever before. Suddenly, entrepreneurs don’t have to jump through so many hoops to get a great idea off the ground.
Mobile credit card processing: accepting card payments through technology like PayPal and Square means that vendors can afford to accept card payments anywhere and with minimum set up effort, which usually means that the sales potential is increased multi-fold and businesses are future-proofed.
Borderless money transfer: currency fees are now a thing of the past thanks to companies like TranswerWise that have revolutionised the way people bank, how entrepreneurs are able to fund their projects and how expats are able to manage payments borderlessly.
What’s the impact on consumer behaviour?
Having the technology to simplify our daily lives in this way is revolutionising consumer behaviour around the globe. Most notably, in Europe, we can now see a drastic shift to using electronic payments. Competition in this regard is incredibly fierce.
All retailers must keep up with the shifting landscape – such as introducing their own mobile loyalty apps or different payment platforms.
At the same time, customers are increasingly more willing to share their personal data in order to receive a personalised shopping experience – yes, on the high street too! It’s not uncommon to receive a digital receipt or have personalised QR codes for a blend of in-store and online browsing and shopping.
Fintech is at the heart of all of these changes and the future looks exciting.
Fintech and Direct Debit
Direct Debit was once merely a resource for collecting ongoing payments. It was a pretty useful one, but its aptitudes were limited. Nowadays, Direct Debit is a front and back end sales aid and an administrator’s ally.
An increasing number of people are choosing to join memberships and subscriptions online. As such, making a long-term payment commitment like a gym membership or car insurance is getting quicker and more simple.
The power is in our fingers. People can sign up from their couch or train commute. With comparison sites on the up, it’s easy to find the best Direct Debit deals spread out over a flexible time period.
Even painstaking failed payment procrastination is a thing of the past. Our own MyPayments portal allows customers to login and manage the payment first-hand before it becomes a growing issue. No lengthy phone-calls. No embarrassment. Hurrah!
DFC is a leading Revenue Solutions Management Solutions provider, handling Direct Debits for thousands of happy customers across the UK.