As financial technology continuously evolves, it can be difficult to keep up with the latest disruptors in the industry and exactly what they can mean for different industries. However, keeping abreast of the latest FinTech advancements is essential for any professional in the field. This blog post will look at some of the current financial technology disruptions and how you can prepare for future ones. We will also share why FinTech courses are becoming increasingly popular for professionals who want to stay ahead of the curve.
What are Financial Technology Disruptions?
Financial technology disruptions are technological advances that significantly impact the financial services industry—an industry upon which many other industries rely. These disruptions can come from new products or services, changes to existing products or services, or completely new business models. Some examples of recent FinTech disruptions include mobile payments, peer-to-peer lending, and cryptocurrency.
Current FinTech Disruptions
Here are some of the most significant financial technology disruptions that are happening right now:
Mobile payments have been one of the most significant FinTech disruptions in recent years. They refer to any payment made using a mobile device, such as a smartphone or tablet. These payments are convenient for consumers and businesses as they allow for fast and easy transactions without the need for cash or checks. Mobile payments have grown in popularity in recent years due to the increasing ubiquity of mobile devices and the technological advancements that have made them more secure.
P2P lending is another relatively new financial technology that has seen significant growth in recent years. Peer-to-peer lending platforms like Lending Club and Prosper allow people to borrow and lend without going through a traditional bank or financial institution. These platforms are convenient and typically offer lower interest rates than traditional lenders. However, they also come with some risks, such as the potential for fraud or defaults.
Cryptocurrency is a digital or virtual currency using cryptography to secure transactions. Cryptocurrencies are decentralized, meaning they are not subject to government regulation like traditional fiat currencies. Since Bitcoin’s creation in 2009, it and other cryptocurrencies have grown in popularity due to their potential to divide costs by allowing users to avoid transaction fees charged by banks or other financial institutions. Yet it’s worth nothing that cryptocurrencies are also highly volatile and have been known to fluctuate wildly in value.
Another interesting disruption in financial technology is the increasing use of artificial intelligence (AI). AI can perform various tasks, such as fraud detection, risk management, and investment analysis. As a result, many believe AI will play a major role in the future of finance as it has the potential to improve efficiency and accuracy in various financial tasks significantly.
How are Businesses Utilizing FinTech in Different Industries?
Next, let’s examine some unique ways businesses in different industries utilize FinTech.
Banking and payments
The banking and payments industry has been one of the most affected by FinTech disruptions. Banks and other financial institutions have had to respond to the rise of mobile payments, peer-to-peer lending, and cryptocurrency. In turn, many banks have started offering mobile payment options to their customers and are also investing in blockchain technology, the underlying technology behind Bitcoin.
Financial technology disruptions have also impacted the investment management industry. For example, artificial intelligence is being used more frequently to automate investment decisions, including portfolio management and stock trading. Robo-advisors, which are automated investment platforms that provide recommendations based on an individual’s risk tolerance and goals, are another example of how FinTech is changing the investment management industry.
The insurance industry is another that has been transformed by financial technology. The rise of the sharing economy, which refers to the growth of collaborative consumption platforms like Airbnb and Uber, has created new risks that need to be insured against. In response, insurers have started offering new insurance products specifically designed for the sharing economy. Today, many home-sharing platforms now offer host protection insurance, which covers hosts in case of property damage or liability claims.
Examples of Future Financial Technology Disruptions
While it’s impossible to predict precisely what the future will hold, some financial technology disruptions are likely to occur more frequently than they already are and become even more popular in the coming years.
Some of the most promising advancements in financial technology include:
- Blockchain: This distributed database allows for secure, transparent, and tamper-proof transactions. This technology can revolutionize the financial industry by streamlining processes and eliminating the need for intermediaries.
- Robotic process automation: Robotic process automation (RPA) is a type of software that can automate repetitive tasks. RPA has the potential to greatly improve efficiency in many areas of finance, such as compliance and fraud detection.
- IoT-enabled financial products: The internet of things (IoT) refers to the network of physical devices, such as vehicles and home appliances, that are connected to the internet. IoT-enabled financial products are those that make use of this technology to offer enhanced features or services. For example, a smartwatch could be used to make mobile payments or track spending.
Preparing for Future Disruptions
As we’ve seen, financial technology is constantly evolving and changing. This means it’s essential to stay up-to-date on the latest disruptions to prepare for them. One way to do this is to take FinTech courses or participate in FinTech events. They help you learn about the latest advancements in financial technology and how they may impact your business. Additionally, it’s important to keep an open mind and be willing to embrace change. This can help you adapt quickly to new disruptions and take advantage of any opportunities they may present.