Think of your average Thursday afternoon. As you get ready for a night out, you pay your internet bill using Fawry, use your credit card to Uber to your restaurant and split the bill with Nexta app. Most of us use Fintech in our everyday lives without knowing it. Of course, any reference to “finance” is a turn-off for the average Joe (yours sincerely included) so I’ll try to keep it short and to the point.
Fintech is an abbreviation for ‘finance’ and ‘technology’. It refers to any computer or mobile-based software (and sometimes hardware) designed to automate, digitise and disrupt daily financial dealings.
Fintech also encompasses a large suite of financial services including borrowing, insurance, investment and risk management. It is such an enormous industry growing at lightspeed that Brett King, a world-renowned futurist, and speaker stated “At 2030, I would say that you will probably have two billion people that’ll be using day-to-day banking services, independent of banks”. In fact, the global Fintech technologies market size was valued at $110.57 billion in 2020 and is projected to reach $698.48 billion by 2030.
But wait! Don’t let all these numbers put you off and let’s get down to the basics and ask the prime question, what does that all mean to me? Surely, we’ve all had a negative experience with traditional methods. In today’s ever-changing world, technology in finance was only inevitable. This is where Fintech slipped in.
Fintech offers an easy and barrier-free onboarding process to customers, not least of which the ‘unbankable’, facilitate peer-to-peer lending and accelerate money and fund transfers. That’s not where it stops; A Covid world has created the necessity for cashless money dealings to weather the storm and that’s where Fintech shined.
Businesses also took a piece of that pie. Accelerated funding and faster ways of moving payments meant that a businesses’ efficiency took a boost. Loaning is also a major part of Fintech. Every business owner knows loaning money from traditional institutes can be a slow and painful process. As a matter of fact, in many instances a loan request would take up to 180 days to process and in today’s fast-paced world the ship would’ve already sailed by then.
So, here’s the next important question, Fintech might be fast for customers but is it safe? Surely dealing in hard, tangible cash is the safest way of doing things, right? Not entirely correct. Apps are at the heart of Fintech and an early on understanding to their vulnerability to cyber-attacks has allowed for leaps in cyber security that made them virtually impermeable. Nexta for example, a fast-growing app-based Fintech in Egypt, has combined a suit of biometrics, facial recognition and end-to-end encryption that has left nothing to chance. As the world also moves to digitisation, countries’ official financial institutions have crafted stringent laws and regulations, that when applied, left no room for money laundering and other foul play.
Well, what is next then for the revolution in financial technologies? The future remains to be seen by this ever-expanding industry and if whether that exponential growth witnessed in Fintech due to Covid will sustain or be a case of ‘boom and then bust’. What’s sure is that the industry will continue to gather momentum fueled by its ability to adapt and by onboarding new customers as trust is slowly but surely built along the way.