Fintech is rapidly and continuously evolving. Despite the temporary halt due to the pandemic, fintech companies didn’t stop creating new infrastructure and platforms. Charter Spectrum cable plans take you to another dimension with their attractive cable deals.
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Undeniably, fintech has revolutionized the financial sector. In the world of banking, fintechs are always on the radar to see what’s hot and trends that the industry should be paying attention to.
Investors are still looking for innovations to send and receive payments that are less onerous than the current ones for businesses and consumers. Investors keep an eye on the next big thing in the digital payments field.
Things to Keep an Eye on in Fintech
Currently, open banking is making a buzz in the fintech space. The concept will help lenders that are not accredited to develop financial services. Open banking will allow firms to link the services directly to consumer bank accounts, thus enabling payments.
Investors are keeping a watchful eye on this new generation of financial services. Several players are working on this, hoping to crush hefty credit card fees charged by companies to merchants.
The trend has gained momentum in Europe, which ignited the interests of investors. Plaid, a Silicon Valley start-up, received $13.4 billion in funding last year.
Financial services giants like MasterCard, Visa, and even Apple are paying close attention to open banking. Apple recently acquired UK fintech start-up Credit Kudos for $150 million as part of Apple’s expansion of its Buy Now, Pay Later program. Meanwhile, Visa acquired Swedish company Tink for more than $2 billion.
Then there’s embedded finance, which is all about incorporating financial services into the infrastructure of a business. This allows companies to streamline their financial services without leading customers away from their business.
Lastly, there’s banking-as-a-service; companies outside of the financial industry ride on traditional or regulated institutions to offer their services such as digital wallets, credit cards, and loans, for example.
The concept allows firms to create their own tech and do all the work related to it like applying for licenses. However, the concept could take years to materialize and would require tens of millions in funding, according to Ian Dimitrova, CEO of OpenPayd.
Non-traditional banking services are getting the attention and credibility they need. This would provide more room for more friendly competition while at the same time improving offerings that will deliver more value to consumers. With innovations and better flexibility, this will give consumers more confidence to transact business.
Fintechs will help traditional financial services reduce operation costs and time associated with manual work. Also, as fintechs continuously innovate, traditional institutions will be forced to keep up with the competition, prompting them to provide new and improved products and services.