Cryptocurrency and its Impact on Fintech
Cryptocurrency is still in its infancy, but experts believe it will quickly transform the financial landscape – we just aren’t sure quite when. With its overall sense of security, decentralization, and easy tracking, more people will turn to cryptocurrency especially with the onslaught of fintech startups vying for consumers’ attention.
Even though there’s still a sense of unease with cryptocurrency and how it works, overall it will help the fintech market grow faster than it’s already growing.
Here’s are a few ways cryptocurrency already helps and/or affects fintech startups.
Cryptocurrency is great for two markets – the unbanked and areas without a surplus of traditional banks. Areas without banks or easily accessible banks leave their people without ways to handle most financial transactions.
This opens up more possibilities for fintech startups to create services and products for people in these areas. While crypto may not be wildly adopted in countries with a fixed banking system and stable currency, there will still be those who prefer it over the traditional currency system. This means fintech startups have the world at their fingertips.
Faster Money Transfers
Fintech is all about ease and speed and cryptocurrency helps this process along. Traditional money transfers through the banking system are riddled with stipulations and red tape which can slow things down.
Cryptocurrency with its decentralized system speeds things up, making transfers happen in real-time versus waiting days or even weeks for the transfer to take place. This could work in favour of fintech startups.
Less Risk of Fraud
Fraud is a serious risk no matter what financial product or service you offer. Banks and other financial institutions face high risks of hacking and theft, making consumers feel uneasy. Cryptocurrency and its decentralized ledger enhances security, providing consumers with a greater sense of peace of mind.
Records can’t be mishandled or even manipulated because of the decentralization and encryption of the data. This makes fraudulent activity much less likely.
More Availability to International Markets
With everyone operating on the same currency, there are more opportunities for international financial transactions and trading to take place without the complicated red tape and speed issues.
With broader markets, there’s more potential for fintech startups who may or may not be well received in the US. As other countries adopt the fintech strategies, it will quickly catch on in the US, giving startups even greater audiences to work with thanks to a decentralized currency.
Cryptocurrency will Continue to Grow
While it’s slow in its growth thus far, cryptocurrency will help the fintech industry grow even faster and larger. The security, speed, and possibilities it opens up create an endless array of possibilities for companies looking to enter the financial landscape. While there will always be the threat of the ‘big banks,’ fintech startups have many resources at their disposal that promise to change the landscape of how traditional consumers handle their banking and other financial transactions.