In the recent decade, the finance sector is one of the key industries that witnessed significant innovation and transformation. The technology growth has brought several novelties to the current society and constantly transforming the method people handle monetary operations. Fintech startups bring even more innovative alternatives challenging traditional financial institutions to take further steps while providing an opportunity to collaborate. Over 60% of the traditional organizations seek a partnership with startups worldwide, so it is not astonishing that cash flow in the fintech sector is more. Especially in the last few years, the total investment amount is 22 billion Euro across the globe. Fintech startups with potential technologies are already experiencing the hype due to its disruptive technologies. Let us see about Top Factors disrupting FinTech. 

When it comes to the financial and banking service, the fintech sector has been a prominent disruptor. It is the technology that comes and destabilizes the current infrastructures for the betterment. However, what happens when the other factors come into the picture as a potential disruptor of the financial sector? 

The blog covers various factors and technologies that disrupt the Fintech space.  

In the recent decade, the finance sector is one of the key industries that witnessed significant innovation and transformation. The technology growth has brought several novelties to the current society and constantly transforming the method people handle monetary operations. Fintech startups bring even more innovative alternatives challenging traditional financial institutions to take further steps while providing an opportunity to collaborate. Over 60% of the traditional organizations seek a partnership with startups worldwide, so it is not astonishing that cash flow in the fintech sector is more. Especially in the last few years, the total investment amount is 22 billion Euro across the globe. Fintech startups with potential technologies are already experiencing the hype due to its disruptive technologies. 

When it comes to the financial and banking service, the fintech sector has been a prominent disruptor. It is the technology that comes and destabilizes the current infrastructures for the betterment. However, what happens when the other factors come into the picture as a potential disruptor of the financial sector? 

The blog covers various factors and technologies that disrupt the Fintech space.  

How Fintech Disrupted Financial Services

In the past, FinTech was starting to face changes in how financial services are being delivered. The key points that the financial sector executives considered will have a huge impact on the companies.  

1. Providing better personalization and professional service in the retail finance sector will break the hold of the standardized products 
2. New market will be established by providing more opportunities to bring more profitable audiences
3. Incumbents would use the online social platforms and norms to get more potential control over the financial supply chain factors, starting from the decision support to financial intermediation. 
4. The emergence of new data sources would boost the growth of analytics and AI. 

For the most part, the predictions came true, which led to a widespread acceptance of the technology. 

Big Brands Are Competing With Startups

Fintech startups have proven their track of success by vividly acting and innovating the products that their customers require the most and providing the easily accessible financial service powered by cutting-edge technology. Startups could serve people with transaction services such as paying their bills online, getting accustomed to digital payments, and contactless transactions. On the other hand, well-established financial institutions have constantly been monitoring and investing in acquiring Fintech startups. Eventually, folding innovations and new technologies into their portfolios and stacks. 

Below mentioned are the acquisition of the leading financial institutions: 

1. Between 2018 to 2020, Citigroup and Goldman Sachs participate in 38 and 59 Fintech deals, respectively. 
2. JP Morgan invested in over five companies in SMB solutions and ten organizations in the capital market in the same span.
3. In 2012, other financial institutions like Fifth Third Bank, Morgan Stanley, Capital One, Bank of America, and Wells Fargo backed over 10 Fintech deals. 

Blockchain 

Blockchain is steadily becoming an influential technology due to its multiple applications. This technology is gaining its significance in the financial sector for its advanced abilities and advantages such as low-cost operation, security from fraudulent activities, transparent and decentralized operation. The blockchain thrives on various conditions such as multiple writers, shared repository of information, minimal trust, interdependencies between the transaction, and the presence of intermediaries. These conditions are the answer to the evolution of disruptive technology. Though not all aspects of the financial system will encounter a similar impact by blockchain technology in the nearest future, it is believed that the payment solution will be implemented at the fastest rate. 

Big data

As Big Data brings transformation in many industries, the potential of data is anticipated to be the same, and it is anticipated to continue its momentum. Big Data innovation is at its core performance in the financial markets while bringing the potential of disruptive technology to credit scoring and lending. 

Furthermore, big data extracted from the social media portals are already gaining potential attention from the new lenders shared by people on various networks.

Artificial Intelligence (AI)

Fintech industries have already implemented Artificial Intelligence to enhance their decisions and solutions. One of the key benefits is intensively working on the chatbots, tracking account activity, and executing financial operations are some of the potential examples of the AI application. 

Similar to the advancement of chatbots, automated advisory solutions and Robo advisers are expected to become essential trends as the price associated with traditional advisors, which may not make sense for a major part of the financial clients. AI engines are highly capable of identifying the related data in unstructured text, the relationship between the companies, topics, and much more. When it comes to banking services and financial institutions, AI implementation can gain instant and comprehensive insights into the legal documents by identifying and analyzing the data from contracts and legislation. 

Takeaway 

The pandemic period accelerated the utilization of Fintech services, which brought about a critical mass of customers utilizing digital payments, online banking, and other contactless transactions. Like any other service, the Fintech sector battles to control the traditional infrastructure that seeks to disrupt and support the innovations. 

Irrespective of the various circumstances, the fact remains the same that the FinTech apps play an integral part in smooth functioning of the operation where contactless transaction and process becomes essential. FinTech proves its efficiency in delivering a delightful and personalized experience that makes customer’s lives easier.