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Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 5 years ago
It is time to
sum up the results of the year 2018 – financially very difficult and very
dynamic. New technologies, related phenomena and terms are coming into everyday
usage in financial and legal activities.
In this
article, the rules of the new game called “FinTech” are presented in an
accessible way.
Fintech is a
buzzword that has now become a trend in financial and business communities.
Many have heard
it, but very few people are aware of the fullness of this phenomenon. Financial
technologies, or FinTech – is an industry consisting of companies that use
technology and innovation for their activities, which compete with traditional
financial organizations, for example, banks. New technologies against
bureaucracy!
Global changes
and general deoffshorisation occurring in the modern world require business
adaptability. The boundaries between countries, currencies and even types of
money are blurred.
Electronic
currency, cryptocurrency and online payment are already used almost as actively
as paper money. Registration of FinTech companies, FinTech business on a
‘turn-key’ basis, obtaining payment licenses and licenses for electronic money
(EMI and PSP), e-commerce, creation and maintenance of investment funds, hedge
funds, crypto exchanges and crypto exchangers, gaming licenses/gambling
licenses – all this has reached the top of the services of consulting companies
today.
Five years ago,
we could not imagine that e-money and e-commerce would go fully into all areas
of our life and financial activities. Today, the doubts about e-currency being
absolutely adaptive, independent and viable have finally disappeared.
Currently, the
FinTech industry includes both numerous technology startups and large
established organizations that constantly improve and optimize the financial
services provided.
These are both
online payment systems and stock exchanges that help to make currency exchanges
on the Internet; all sorts of financial companies that deal with electronic
money, where the user can open an account online and make money transfers;
online and mobile banks, as well as traditional banks that optimize and improve
the quality of their service, using modern technology and electronic money. The
developers of the software themselves also work in the field of FinTech.
FinTech is gaining a huge popularity, hundreds of
crypto exchanges, online banks, payment systems, hedge funds are created, ico
is held. Advanced
banks have already gone for their customers in digital channels, and it was a
right thing to do.
According to Markswebb Rank Report, the growth in the
number of users of digital banking, mobile banking worldwide over the past year
amounted to 51%. And it is no coincidence: the mobile bank is convenient,
understandable and always available. It allows the user to easily control all
of their financial transactions, and therefore control the situation as a
whole. As a
result, such transparency increases the loyalty and trust of users to the bank,
not only as a brand, but also as a financial partner.
The “outdated”
scenarios for the provision of banking services and advice through physical
visits to the branch or, in particular cases, by telephone, have been replaced
by new tools: chat on the bank’s website and in its mobile application, online
feedback forms and various instant messengers. The trend, which has already
become a reality of today, is the integration of banks with social networks,
first-line customer support using chat bots.
All modern
payment systems are no less secure and reliable, and many of them are even more
secured than old-fashion ones. Some have separate security code systems for
reading fingerprints and iris scanner.
Also, the
introduction of digital channels (messengers and services) by banks into the
customer service system really gives a tangible economic effect and increases
loyalty. Digital communications reduce the load on the head banks and save
human resources. While digital and online banking has spread in all areas
around the world, we are seeing an increase in the number of digital
transactions on an annualized basis almost everywhere. In some countries, of
course, the processes are much slower.
The development
of financial technologies modernizes traditional financial services and
products in several areas:
1. Payments and
transfers: online payment services, online transfer services, P2P currency
exchange (transfers between individuals.), B2B payments and transfer services
(transfers between legal entities), cloud offices and smart terminals, mass
payment services;
2. Financing:
P2P consumer lending, P2P business lending, crowdfunding;
3. Money
management: robo-advancing, financial planning programs and applications,
social trading, algorithmic exchange trading, targeted savings services.
Modern and
convenient online banks and payment systems are confidently entering the arena.
Tops of mobile banks: in Ukraine are definitely
“Monobank” and “Privatbank” (it is interesting that both systems were created
by the same developers, but today Monobank has jumped much further in service).
In the near
abroad it is definitely “Tinkoff Bank”.
Outside the CIS, innovative payment systems compete
for being FinTech leaders:
United Kingdom:
“Revolut”, “Monzo”, “Transferwise” – payment services that offer their
customers to open an account in the payment system for free.
Paysera
(Lithuania) is a well-known Lithuanian payment system, a modern counterpart to
a bank.
USA: “Stripe”,
“Adyen” – leaders among American payment systems, offer simple account opening
and low tariffs, as well as card processing.
Germany:
“Fidorbank”, “N26” – German online banks offering their customers to open IBAN
accounts quickly and without personal attendance.
USA: “Ally
Bank”, “Chime” – convenient online state banks.
Financial
technologies have brought significant benefits to the user in many areas of
life.
The largest
banks in the world have heard the demand from their customers and immediately
began to develop innovations inside. New FinTech and IT departments are being
created to meet the needs of spoiled customers.
The opening of
personal online accounts and the demand for similar banking products has grown
in the world to 69%, which is twice as much as it was two years ago.
The transition
to mobile interaction to attract customers is obvious.
Mobile sales
readiness rose on 50% in the United States and Europe last year. The largest
players in these regions are taking quick measures against mobile devices,
while their colleagues in the CIS countries are moving much more slowly.
Apparently, for
financial companies and banks that have not yet begun to develop digital
products, this has become a competitive necessity and probably an opportunity
to live in the financial market.
Will banks be
able to create a holistic experience and online service that brings together
their branches, consultants and new digital investments? The answer is
definitely yes. And the implementation of banks in digital will happen faster
than we all expect.
In the next
article we will look at the problems that FinTech companies face when entering
a competitive market.
And also we
will consider the difficulties in the use of innovative banking and payment
services.
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