Top 5 Most Important Fintech Sectors
Fintech is the combination of the financial industry and technology industry to create one powerful force. While fintech was relatively new for a while, it has quickly spread through just about every financial sector available today.
What are the most important fintech sectors? Here are the top five we chose.
This has to be one of the largest changes made in the financial world today. Consumers no longer have to go to the bank to conduct just about any bank transaction – they can do it from their phone. Mobile deposits, opening accounts, and transferring funds are just a few of the simple transactions you can conduct from anywhere with your mobile phone.
Mobile wallets are dual-focused. They serve as a place to store money, which is great for unbanked individuals. But their main focus (at least in the US) is for touchless payments. As the pandemic continues and the use of cash is frowned upon, more businesses are accepting mobile wallet payments.
Mobile wallets were one of the first places fintech started (think PayPal) but today the use is much more widespread. You can use services like Google Wallet and Apple Pay. There are also standalone services, like Dwolla and Mozido.
Today, individuals don’t need to go to a bank to get financing. Peer-to-peer financing, which is financing from other individuals makes it easy to get the financing needed.
Peer-to-peer lending removes the typical barriers traditional banks have for lending (tough requirements). They have much looser requirements and at much lower costs than traditional banks charge, especially if you have less than perfect credit or other unsatisfactory conditions.
Robo-advisors make it easy for investors of all levels to jump into investing. Whether you start with $100 or $10,000, there is a robo-advisor for you. Investors can open traditional (taxable) investment accounts or tax-advantaged accounts, such as IRAs and Roth IRAs in the US and ISAs in the UK to save for retirement while enjoying the tax advantages.
Robo-advisors create and manage portfolios so you don’t have to, managing every aspect of it for you.
Crowdfunding can bring money together for individuals in need (GoFundMe) or certain types of investments, including real estate investment trusts. No matter which way you use crowdfunding, the definition is the same – the pooling of funds of multiple people (sometimes thousands) to achieve a greater financial goal.
Fintech has changed the way we handle money today whether you’re talking about banking, investing, or even just paying friends and family. You can transfer funds, pay for goods, and invest all with the touch of a button on your phone.
If you haven’t taken advantage of fintech yet, now is a great time. It’s still in its infancy and many changes will still come through, but it’s helpful no matter which way you look at it. Whether you’re a consumer or a financial institution there are ways that fintech can help change the way you look at and handle money.