Financial technology (or FinTech) is transforming the world as we know it. Whether you realize it or not, FinTech is all around us. These technological advances have changed the traditional ways of banking, insurance, investment, and real estate. In fact, this technology is expected to grow and play an increasingly important role in the banking and finance sector. FinTech is changing the industry at a rapid rate in order to keep up with customer and business demands.
Mobile Banking
Gone are the days where you have to make a trip to the bank to withdraw, transfer or deposit money. This financial technology has become a standard feature of most financial institutions. Not only do customers want digital access to their bank accounts, they expect it. Instead of having to write a cheque, you can now make digital payments with the click of a button. Instead of going into the branch to deposit your paycheck, most banks now utilize remote deposit captures.
Biometrics
Forgot your debit card? No problem. In the near future, PINs will likely become obsolete and we will rely solely on biometrics to access our bank accounts. This could consist of confirming your identity with biological traits, such as using your voice, fingerprint or by the facial scan. While biometrics are not offered at every financial institution, they are growing in popularity.
Thumbprint recognition is already becoming popular on mobile devices and is now a common security method for many banking apps. In fact, Japan is leading the way with an estimated 15 million people already using this biometric authentication to access their accounts. Other countries are not far behind in adopting this method as well.
Virtual Banks
Virtual or online banks (not to be confused with online banking) have no physical branch. You can simply apply to open an account and get approved online. This is appealing for many customers because no branch means less everyday banking fees and more savings. For more information on some of the top online banks and their rates, click here.
Online banks use sophisticated technology and go to great lengths to protect your funds. Regardless, you should always take advantage of using biometrics whenever possible, strengthen your password and change it often, enable two-factor identification, and guard your banking information while in public. By following these best practices, you can give yourself even more peace of mind.
Electronic Money Transfers
The industry has seen the rapid growth of FinTech companies in regard to electronic transfers. Companies like Western Union or PayPal allow you to send money across the world with ease, making overseas transfers much more affordable. In the past, you would have to go into your physical bank branch and wire the money to the receiver. Now, from the comfort of your own home, you can transfer money directly to a bank account, to a mobile phone or to the receiver for same-day cash pickup.
Mortgages
FinTech has also greatly improved the mortgage process; however, traditional lenders are still dominating the industry. Fortunately, potential buyers no longer have to wait out a lengthy application process these days; lending has become much more digitized. In fact, one study by LendingTree confirmed that homebuyers in 2019 received their homes 11 times faster than in the previous year. Not only that, but these numbers are expected to continuously grow.
FinTech has, without a doubt, greatly improved customer experience, benefiting both borrowers and lenders alike. Lenders can now easily access important information about potential homeowners online, such as their complete financial history. This technology is one of the main reasons that the mortgage application process has been expedited. With the role of FinTech increasing at this rate, there is no doubt that customers will eventually be able to fully secure a mortgage without ever having to leave their house.
The Impact of FinTech on Future Banking
The role of FinTech in the banking and finance sector is thought of to be a modern movement, despite the fact that FinTech has been around for quite some time. However, this technology has recently taken off, continuing to grow and greatly improve the overall customer experience. While the FinTech market is expected to hit $465 billion by the year 2025, only time will tell how big of an impact it will truly have on our lives.
According to Deltec Bank, Bahamas – “When more financial institutions adopt FinTech solutions, such as mobile banking, biometric authentication, electronic money transfers, and digital lending processes, they will see much higher customer satisfaction.” Additionally, with these advances, they will be able to reach more customers than ever before.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.
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