The world is a constantly and drastically changing environment and it has been this way for a long time now. However, the recent decades and the immense expansion of technology has resulted in even more vast changes than ever before. Our lives are now highly dependent on a whole variety of gadgets. We work online, study with eBooks, and entertain ourselves on the internet. The demand for technology is on a steep rise and industries across the globe are striving to adapt.
Obviously, this change most significantly affects the technology industry itself. Hardware manufacturers, as well as software producers, have witnessed unprecedented growth in the past two decades. Sectors tightly linked to technology and its development, such as video gaming, have also naturally flourished along the way.
Yet, throughout this process, many industries that were always devoted to traditional means of business adapted to technology faster than expected. The finest example of this trend is the financial industry which managed to become one of the most effectively digitalized economic sectors in the world. This change benefited businesses within the industry as well as the network as a whole significantly, boosting output and attracting more customers.
Technological adaption of the financial industry: the story of fintech
Many benefits of the 21st century are taken for granted by us without even thinking about the reality we lived in not long ago. Today, performing a range of financial operations without leaving the house or even calling a hotline operator is not a big deal. Yet, just a few decades ago, not even credit cards accepted and loved by societies nor they were actively used anywhere around the world.
According to psychologists from 55brokers, cash established itself as the only means of financial transactions. It is tangible, visible, and easy to trust rather than invisible assets on a card or cloud. This primarily is why people struggled to accept credit cards in the 1950s when they were first introduced to the public. Later on, debit cards were also launched, yet, they shared the same fate. Cards remained largely unpopular until the 1990s when the industry really took off with cashless payments.
The last decade of the previous millennium was the era of jet flights and credit cards. That was when large masses of people started to travel long distances, making the world more interconnected than ever before. Thus, with exclusive offers and convenience, the trust in plastic cards surged, starting the real history of fintech.
Financial technology today is mainly used in reference to web and mobile banking, neo banks, and if we believe this cmtrading review then for trading as well. Yet, in reality, fintech started simultaneously with the first means of cashless payment. The industry is thriving amid the skyrocketing demand for digital services.
This is especially true for people looking for financial services they can use without leaving home. Considering remarks made by people who trade forex with FXTM it’s almost obvious that financial technology may have finally found its desired moment to become the go-to method not only for bank users but for much larger and more interactive customers as well.
The globe is gradually starting to refuse the use of cash. Instead, cashless societies are expected to emerge in the nearest future. This statement and anticipation would have been absolutely unrealistic not long ago, yet today, Sweden is already close to the goal. This Northern European nation is considered to be one of the frontrunners in terms of cashless payments and financial digitalization rate.
What makes this the right time for fintech
In general, fintech is doing great! This industry, or rather a niche, is attracting more investments than ever before. Some completely digital services are launched while more and more people, as well as businesses, choose to go cashless.
However, amid the global coronavirus pandemic, the future for fintech businesses is brighter than ever. The year 2020 will surely go down into history books as one of the worst in modern history. The virus that has already infected more than 3 million around the world is causing the biggest economic downfall since the great depression.
Millions of people and countless businesses are bracing for an uncertain future. People are left without jobs or a source of income in all parts of the world while some big names might soon be filing bankruptcy.
As of today, the only known way how to effectively fight against the virus is through active social distancing and lockdown measures. Billions of people are on strict lockdowns around the world, severely restricting their mobility. Amid the situation, digital services are more important than they have ever been.
Under such circumstances, fintech businesses are providing services to their customers from home, without putting their health under any risk. A growing number of people that were not users of eBanking are now downloading mobile banks in an effort to receive services while remaining in quarantine.
In the age of pandemic, digital financial services offer more reliability, stability, and safety than any traditional form of operations within the industry. Yet, the pandemic is not the only accelerator of the pace at which the sector is growing. Since the 2008 world financial crisis, people’s trust in major commercial banks has fallen importantly. Even a decade from the devastating fall, two-thirds of Britons do not have trust in commercial banks. On the other hand, trust in neo banks and digital banking products is on the rise. Many believe that this type of service provision offers more safety and transparency.
Moreover, the demographics of bank customers is yet another crucial factor. After the immense social change millennials brought with them, the younger Generation Z is taking it even further. This age group is set to become the largest purchasing power we have witnessed in modern times. Businesses should get ready to meet their needs which are rather different from what previous generations asked for. Generation Z-ers are more technologically advanced than older generations and almost exclusively use digital services in the provision of goods and services. The financial industry is not an exception as these young people expect businesses to meet their needs.
Considering all of the abovementioned circumstances, this most certainly is the right time for fintech to thrive. The dynamic growth the industry has had for decades now will be significantly boosted by the pandemic which is increasing the demand for remote services. There has never been a better time to invest in financial technology businesses.