Adoption Under The Umbrella of Fintech.
A lot could be said about the rapid growth of innovation in the FinTech industry in the past years but not all technology is adapted as quickly as anticipated (i.e ApplePay nor Google Wallet still hasn’t cracked mass adoption). According to the EY Fintech Adoption Index, 50% of consumers use payment services — 65% intend to do so in the future. What’s more interesting is that there is a 33% Fintech Adoption compared to EY’s 2015 study with only 16% adoption hinting on an exciting opportunity for a widely untapped market.
Here’s a glimpse of how different catagories rank comparing adoption in 2015 and 2017:
While brick-n-mortar (Retail Banking) lines in banks also grow, we now have a bubbling conversation for Wetware vs Chatbots to change how we bank and the innovation hasn’t been slowing down. Here’s proof. Companies disrupting financial services such as: Robinhood offering free stock trading for anyone with a smartphone and a bank account — completely removing the middlemen lowering the cost of trading for the everyday consumers; LendUp a mission driven PayDay loan service with excellent educational tools for lending and providing an efficient sytem for financial health. They even have a points system which allows you to borrow more money over a longer period of time and allows you to report payments on your credit once you rack up a substantial amount of points, there is no credit check required which serves a larger demographic and is financially inclusive for everyone; goodments. is an even more interesting company based out of Australia adding sustainability to investing also known as Impact Investing, by looking beyond the return on investment (ROI) to first measure a companies Environmental, Social, Goverenance, and finally Financial performance, certainly ahead of it’s time; and by now you should have atleast heard or used payment services Venmo, Square’s Cash app, and Facebook’s messenger feature to send or receive money with little to no fees.
More on these service’s and others in later post in greater detail but this is just the beginning so brace yourselves…
Cool stuff so far right? If you’re still here you’ll enjoy this next part — fasten your seatbelts.
The financial service’s I mentioned earlier are outside the traditional realms of banking because no longer will you have to:
A. Walk into a bank
B. Stand in long lines to make any transactions
C. Spend time & money on a broker + fees, etc…
D. Spend time describing to the banker who you want to send money to0 ,verify accounts, and wait 3–5 business days to receive money (Atleast in the near future you won’t, more on that in future post.)
but are these services secure? Should you trust them with your $$$? These are all valid questions that FinTech companies are challenged with and have to posititon themselves on trust for consumers. Especially with millennials and increased generated interest in transparency for both small and large corporations. A task that FinTech companies are more than willing to fully take on.
The EY Adoption Index also states how FT companies are not only significant in the industry but also setting benchmark for financial services:
“Established financial services firms face both “unbundling” and “rebundling” of their propositions resulting in disruption of traditional customer relationships. However, this also creates opportunities for start-ups and established firms to collaborate. Investment and regulatory support will continue to play a role in stabilizing the development of the FinTech industry, which will benefit consumers.”
Whoa.
With such a robust and segmented industry that prides itself in a plight of secrecy, that same competitive advantage also serves as a pain point hindering innovation for better financial tools and better yet — financial inclusion. I’m optimistic for the future of FinTech, bullish on this technology and regardless of which way regulation may sway the industry the innovation should NOT stop. There is much more to cover in this space which I cannot wait to highlight (How FT effects traditional investment strategies [Private Equity, VC], BlockChain & Investing, Financial Engineering, and addressing the 3 Billion underbanked). In the meantime thank you for reading the pre-lude of a blog about FinTech, feedback is most welcome. Enjoy a really awesome “SoundCloud”mix while you’re here.
Next up volatile Cryptocurrencies, financial inclusion, and BlockChain.
[ Message me if your interested in stickers for the logo I created at the beginning of the article, first 50 people get them for free. ;) ]
