Financial technology or FinTech has the potential to change the financial services sector. Therefore, it is worth looking into the main trends impacti
Financial technology or FinTech has the potential to change the financial services sector. Therefore, it is worth looking into the main trends impacting the industry.
The end of traditional banking
As Centric Digital (centricdigital.com) reported, almost 40 percent of Americans haven`t visited their bank or credit union in the past six months.
Another survey by Business Insider Intelligence shows that 38 percent of millennials never physically visit their bank at all, except for using an ATM. The number of physical banks has reportedly dropped by nearly half from 1995 to 2015. This is said to be due to the use of online and mobile banking.
However, we are also witnessing the rise of other financial services platforms. There is a proliferation of companies that save, lend and invest faster than the traditional banking giants.
The rise of Blockchain
Blockchain is known as the underlying technology of digital currencies like Ethereum and Bitcoin. Still, this technology may be used beyond digital payments. According to the report, Blockchain allows for safe and secure trading of money, ideas, copyrights, and thus eliminates the intermediaries, which used to be needed to facilitate or manage almost any transaction.
No physical currency needed?
Digital currencies are not supported by any particular nation or government. While some institutions remain wary of using such currencies, they are already impacting the financial services industry. Also, there is an array of financial technology start-ups that use digital currencies and/or rely on the blockchain technology.
Blockchain technology is said to offer major challenges and opportunities. It is to be seen how the financial world will handle them.