Are we nearing the end of the fintech boom?
Just ten short years ago, sending money to family or friends meant writing them a check or doing a bank transfer. When we wanted to buy something online, we had to physically take our credit card out of our wallets and type in the number.
Luckily, those dark days are behind us. Our credit card numbers now live on our phones. We can Venmo cash to anyone who has an email address. Our banks have dedicated apps that we can use to check account balances, transfer funds, and even deposit checks.
We’ve come a long way in terms of financial technology, which begs the question: how much farther can we really go?
Disrupting the Fintech Disruption
Digital banking has made our lives easier.
By definition, disruptive technology refers to advancements that significantly change the way consumers, businesses, or industries operate. In essence, it removes (or severely reduces) the old way of doing things because new methods are far superior.
For example, online shopping disrupted the way we buy things and research products. Smartphones disrupted cellular communications. And fintech has turned the entire financial industry on its head by changing the way we handle money.
But at this point in our digital technology revolution, such advancements in the fintech industry could hardly be considered disruptive. We’ve taken digital finances to the edge of the earth, almost to the point where a “new-and-improved” solution is already a consumer expectation.
Today’s consumer demands more from financial companies than ever, and companies are finding it more necessary than ever to deliver. With the rise of smaller banks and online-only institutions, big banks are getting a run for their money and are finding it harder to stay competitive.
According to Statista, more than 70% of senior banking executives believe that fintech is the way forward, not as a competitor, but rather as a competitive advantage. They’re collaborating with technology companies to create new services for their customers. As a result, many traditional financial institutions are becoming more dependent on fintech to help them maintain a competitive edge.
What the Future Holds for Fintech
Fintech has forever changed the banking landscape, but how much farther can it go?
Disruptive or not, fintech is still very much alive and thriving. The last couple of years have seen significant contributions in terms of rounds of funding and acquisitions. For example, Paypal recently completed its greatest acquisition to date, buying Honey in a $4 billion deal.
The trend isn’t just relegated to the states, either. Fintech is also experiencing significant growth around the world. One of the biggest digital banks in the world is based in Brazil, called Nubank. Mobile banking is a large industry in Kenya. And SouthEast Asia saw more than 80 deals and $700 million in investments last year.
There’s still a huge market with plenty of potential for future fintech success, but to continue to call Fintech disruptive might not hold the same weight as it used to.
Unless of course, someone finds a way to turn our smartphones into cash ATM machines.