Fintech is a term that is being used quite often in the financial realm; however, its meaning remains vague. At the simplest level, Fintech refers to the technology that is being used in order to enable the conduct of financial services. However, Fintech is undergoing many major changes, and its horizon is broadening with each passing day.

Accenture declares in one of its recent reports that investment in Fintech has risen globally to $3 billion dollars in 2013 from $930 million in 2008. The field of Fintech is so broad that it has almost affected all the types of business entities that range from large multinational giants to small-scale businesses. The various components of Fintech included mobile payments, loans, fundraising, money transfers and asset management.

The trends in the Fintech industry are rapidly changing. The global financial meltdown had radically changed the ways in Fintech industry. In the light of global financial meltdown, new regulations are being introduced which increased the need for more Fintech mediums. Furthermore, the technological industry is also experiencing a boom in terms of introducing new and innovative product. Therefore, it is expected that the Fintech industry will also present some new and promising innovations. Customer behavior in the Fintech industry is also subject to dynamism, which is also another important reason for the changing environment of Fintech industry.

The Fintech industry has made the world of finance highly integrated. Previously, the clients had to visit the office in order to perform even the mundane task like inquiring about their bank balance and withdrawing money. Now a simple click on their mobile phones enables the clients to perform all these mundane tasks in the comfort of their schedules. Furthermore, the Fintech has also facilitated online banking transactions, which had not only made life easier for the individuals, but had also revolutionized the business operations to a large extent.

Trends in Fintech

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In this article we will look at 1) importance of Fintech, 2) Fintech applications, 3) factors affecting Fintech trends, and 4) trends in Fintech.


Fintech is a multidimensional field. Its scope in the business world is so large that it caters to almost all kinds of business organizations. Furthermore, the Fintech has greatly increased its accessibility to the clients. These factors have greatly enhanced the importance of Fintech. The importance of Fintech different entities is given as follows:

Importance of Fintech to the World

Fintech has been one of the important drivers for the globalization of the financial world. With the advent of Fintech, the financial services were able to spread their access around the globe. Now, well-established banks work all over the world, and their sophisticated network is being laid down meticulously primarily because of the Fintech evolution.

Fintech has enabled the financial services to become integrated all over the world, which has greatly facilitated the trade of services and goods. Business to business contact and business to client contact had been encouraged due to the advent of information technology. Due to information technology evolution, the people were able to connect with each other across the globe at lesser cost and with higher frequency. However, the business transactions between them were greatly impeded because the financial services were either inaccessible or too expensive to bear. However, with the advent of Fintech, business transactions were greatly facilitated, which has spurred up a new chain of business activities around the globe, thus making the living standards in general to rise.

Importance of Fintech to Small Businesses

Fintech can create a level playing field for the businesses, irrespective of their sizes. Fintech has not only encouraged small-scale businesses to a large extent, rather it has also made their operations much more cost effective. Small businesses can perform many of the financial transactions through their online banking accounts. This is highly cost efficient. Furthermore, the global outreach of small-scale businesses is enabled because of Fintech. Without Fintech tools, small-scale businesses could never hope to do business across borders. With Fintech, the small businesses can raise finance across the world for their ventures. Thus, the importance of Fintech is immense for the small-scale businesses.

Importance of Fintech to Large Businesses

The workload of large businesses has greatly been alleviated due to the advent of Fintech. Large businesses are no more confined to local boundaries and are able to reach out to the global market due to ease in carrying out financial transactions. Large businesses are able to get many online customers globally because of the online payment system. Furthermore, outsourcing of products has become far more convenient than ever before. Instead of opening bank account at every country, global businesses can operate from single bank that is serving at the global scale. Furthermore, by being the client of one large bank, large businesses are often able to arrange special arrangements with their banks that result in cost concessions. Therefore, Fintech has greatly facilitated the global operations of large businesses.

Importance of Fintech to consumers

The consumer tastes have changed incredibly since the arrival of Fintech. The trend of online shopping is accelerating, due to which the online payment system is trending high. Moreover, the global outreach of customers has increased incredibly and now they have an array of products at the global scale to choose from. This has not only facilitated the best price hunt for the consumers but has greatly increased the standard of living of the consumers. In addition, the arrival of smartphones, on the other hand, had further encouraged the customers to perform their day to day financial tasks through their mobile phones. Thus, for customers the avenues of choices have increased like never before, thanks to Fintech.


The applications of Fintech are immense.

One of them is the payments and transactions operations of financial services are greatly radicalized by incorporating new technologies into it. Financial institutions are now maintaining their financial record of clients in electronic databases.

Furthermore, the collaboration of technology with the risk management operations of financial institutions has not only made the risk management process more sophisticated, rather it has also made it more efficient.

Moreover, credit rating of clients has become much easier for the financial institutions because of online databases. The central banks make a compulsion on all the banks under its wing to update the central database of central banks regarding the entire credit history of their clients. In this way, all the banks will be able to know about the defaulters of other banks and will take precautionary measures while lending to those clients so forth.

Mobile banking is yet another application of Fintech. Mobile banking has greatly reduced the overcrowding in banks as customers are able to perform many of the financial transactions through their mobile accounts. Due to the advent of mobile banking, financial institutions can increase their coverage of financial services to remote areas. Now, many people are able to perform financial transactions through their mobile phones without visiting their banks for months.

Trading of goods and services across the country and internationally has increased due to the perfect blend of financial services with technology. Information technology has enabled people to connect with each other globally. The formal trading globally started to take place when people were able to transfer payments from one country to another. Fintech acted as a mediator in this respect, without which international trading would not have existed at current level.

Another important application of Fintech lies in the field of forex market. By incorporating Fintech in the foreign exchange, forex market has turned into a fully fledged market. Fintech has enabled to trade forex like a commodity and also provides many risk aversion services to businesses that deal in forex market.

As technology blended with financial services, financial institutions began expanding their services to the masses. Initially, Fintech financial services were largely confined to the business sector, Fintech has resulted into the advent of retail banking. Through retail banking, financial institutions are able to provide all their services like a one stop shop. It is the retail banking due to which the branching network has expanded to remote areas. Furthermore, Fintech is also being applied in crowdfunding and peer-to-peer lending. Other important applications of Fintech lie in risk and compliance, insurance, financial advisory services, digital wallets, digital and alternative currencies, etc.


Some of the factors that are affecting the Fintech trend are outlined as follows:

Big Data & New Data

Financial industry is one of the largest industries of the world and has been in need to have a pool of information that is rising day by day. Big data is a huge challenge for the financial institutions, and it is opening up the new horizons for innovation. Day by day new information has been generated that has the potential to be added in the financial data. Like, social networking data of a potential borrower is being used increasingly by banks for the credit scoring. Thus, Fintech is in a dire need to manage the big and new data, and that is surely a challenge for it.

Access and Convenience of Technology

The increasing access and convenience of technology is changing the trends of Fintech. Due to technology, the access to online information has increased incredibly. Furthermore, as the financial institutions are required to disclose their financial standards increasingly for the sake of transparency, new avenues for innovation have opened up. Many companies are able to identify a niche in the market, which could substantially reduce the profit margins of traditional financial institutions. For example, there are certain mobile apps that enable the users to perform the payment transactions via phone without the need of any bank account. Such niche products could pose as a serious threat to the traditional banks that generate a huge chunk of their profit margin through online payments transactions. Furthermore, there are certain financial software that enable the outsourcing of entire accounting task.

Dis-intermediation of Banks

Fintech has resulted in dis-intermediation of banks. People are consulting online search engines like Google increasingly in order to search for their financial concerns and are relying less and less on the financial institutions for advisory services. Furthermore, social networks have increased the culmination of this trend even more. Social networks have provided a single virtual or physical avenue where people who are searching for the same questions could address their concerns and gather all the relevant information accordingly. This would lead to decreasing reliance on banking services lesser and lesser.

Furthermore, peer to peer lending has also increased, which again results in the dis-intermediation of banking services. As people are able to connect each other with much more ease after the advent of information technology, they are able to establish their channels of lending and borrowing online. Technically, this has always been the work of the financial institutions to connect the lenders and borrowers. However, due to advanced information technology, lending and borrowers can now connect with each other directly, thus eliminating the need of financial intermediaries.

The investment search for equity financing has also gone online. In addition to that, payment systems are being radicalized increasingly. With the evolution of digital or virtual currencies like BitCoin and Amazon coin (the virtual corporate credit), the need of standard payment mechanisms provided by the standard bank accounts is decreasing day by day. All this could pose a serious threat to Fintech.


Utilizing Social Media Platforms

Social media platforms are a great way for Fintech to increase the access of financial institutions to the masses. Online social media is enabling the financial institutions to connect to the customers at individual level and to provide them services round the clock. Facilitates like that of online accounts, web based credit applications and payment portals are increasing the reach of financial intermediaries to the masses. Furthermore, the social media helps to gather all the people who share same concerns regarding their finances at one place. This development provides a great opportunity to the financial institution to know about their customers in a better way.

Digital Payment Networks

Although cash transactions still play an important role in the digital payments network, there has been a rising trend of digital payment networks. New technologies in Fintech have emerged in this regard. Tio Networks, for example, is a company that facilitates cash conversions through point of sale bill payment, mobile technology and self-serve kiosks. Wipit’s is a mobile payment network which operates internationally and provides the services of cash loading, payments, purchases and mobile remittance just through one click. Thus, the rise of digital payment network is a new trend in the Fintech, and it is expected to completely substitute the cash transactions.

Analysis of Big Data

The availability of big data has brought a radical change in the world of Fintech. Big data has not only increased the availability of information about people, but it has also increased the access to this giant pool of information. Big data has made the credit rating process much more credible and convenient for the financial intermediaries. Due to big data, the online activities of the potential client can be accessed, and his or her credit rating can be done in much more accurate manner.

Upscaling through B2B2C

Fintech provides a great way of collaboration for business to business to consumer connection. In order to serve the under-served niche market of consumers, small scale venture has the potential to team up with established institutions. E.g., Ready For Zero is a company that collaborates with banks in order to deal with the debt management of its customers who are at the verge of insolvency.

The emergence and popularity of Bitcoin

Bitcoin is a kind of cyber currency. It is gaining popularity in the financial institution due to its high credibility in the Fintech industry. Bitcoin has the potential of completely substituting the cash and other electronic bank transfers and will be highly cost efficient.

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Increasingly improved online banking

Due to rapid developments in the technology, the online banking services with respect to Fintech have improved incredibly and have the potential of being improved even more. The online banking has become much more secure and private. Furthermore, it is providing a wide array of services that can be performed through online banking e.g. transfer of payments, balance inquiry, etc.

Fintech is increasingly becoming an integral part of the global business world. It has integrated so well in all the arrays of business world, that its presence has become almost indispensable. There is no doubt that Fintech has a huge potential for innovations, and small Fintech players in the industry can exploit some gainful opportunities in this regard.

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