Fintech is a driver of financial services in the digital world. With new tools, solutions, and products, all participants in financial processes receive a large number of advantages compared to traditional economic models. It includes easy access to various financial products and services, enhanced user experience, fast payments, optimization and automation of many processes, and more.
Whether you are a consumer of financial products or provide services, including Fintech as a Service, or are an investor — in each case, you can enjoy key fintech benefits for business that the fintech industry provides.
According to analysts, the global fintech market is worth about $165.17 billion, and the demand for innovative solutions is still huge, so it is expected that the market will continue to grow in the future. Therefore, let’s take a closer look at the benefits of this industry to understand what advantages fintech may offer to:
- Business
- Consumers
- Investors
Table of Contents
Benefits For Business
For businesses, innovation is not only a way to optimize their operations and reduce costs but also a necessity. With a rapid digital transformation, companies should quickly adapt to change to stay ahead of the competition.
So, the three main benefits that fintech solutions provide to businesses include:
Higher Retention Rates
One of the most essential tasks of fintech products is to provide a personalized user experience. A business that offers its users convenient and accessible tools for financial transactions attracts more attention from the audience and better retains the customer base. It becomes possible through an improved shopping experience and personalized recommendations based on customers’ purchases made and their financial status.
Moreover, innovative products are convenient and faster, which motivates clients to be loyal to the business and continue to use its services.
Processes Optimization
New financial technologies implementation allows businesses to improve their ranking and grow faster. It is due to the systematic optimization of many financial transactions and process automation. Thus, innovations help companies to do their work faster and better, as well as reduce some of the costs.
According to the research, organizations that implement fintech solutions experience a 3x increase in revenue growth.
Additional Resources
With seamlessness and fast financial transactions, fintech companies get more resources, distribution channels, and investment platforms. It is ultimately one of the core growth drivers for businesses.
Numerous banking APIs, powerful tools, and innovative products help organizations that implement fintech solutions get more resources for their development.
Benefits For Customers
Perhaps one of the main reasons for the growth in the number of fintech companies is the demand for innovative products from consumers. Given improved and personalized financial solutions, more and more buyers are starting to use fintech products in their daily lives.
Access To Financial Products
New technologies help to significantly simplify the threshold for entering the world of finance for most people.
If, in the case of traditional systems, the user is often required to have specific knowledge in the area of interest to them (for example, asset management, investments, deposits, etc.), then when it comes to modern fintech applications, financial services, and products become more accessible to a variety of consumers.
Personal recommendations based on financial status, the ability to conduct transactions in a few clicks, simple management of finances, and online banking — are benefits many people already enjoy.
User-Friendly Financial Service
Thoughtful UX/UI design of modern applications makes fintech products convenient and understandable for most users.
In addition, tools based on artificial intelligence and machine learning algorithms help analyze big data, providing users with personalized recommendations. It also makes fintech applications friendlier and improves financial connectivity for a particular user.
Finally, data protection in financial applications is a top priority. Constant updates and implementation of the latest security standards significantly reduce the risk of hacking and loss of money as a result of cyber-attacks.
Access To Credit Pool
The main advantages of fintech companies compared to traditional financial institutions include access to a credit pool.
Fast application-to-payment times and seamless operations make fintech platforms perfect for many users interested in getting credit. It is especially true for users with poor credit scores. The lower fees and the simplification of the entire process are also among the reasons why fintech products are more attractive than traditional intuitions.
Benefits For Investors
Fintech is interesting for numerous investors due to its innovativeness and prospects. Also, the fact that both large and well-known organizations, top fintech VC firms, and new startups are present in the fintech industry is another reason to invest. Thus, It is no wonder why more than $90 billion was invested in fintech in 2021, according to Forbes.
Chance To Invest In Unicorn
One of the reasons for the increased interest in the fintech industry is its novelty and the rapid growth in the number of startups.
With the constant emergence of innovations and new players in the market, there is an increasing chance for investors to find a truly promising project that could eventually turn into the next unicorn (a company with a market capitalization of over $1 billion).
Even though investing is always a risk, especially in young industries such as fintech or crypto, the opportunity to invest in a breakthrough solution and thereby significantly increase your ROE is one of the main incentives for investor interest.
Alternative Investments
Another benefit of fintech is alternative investments. It helps diversify the portfolio and look to other asset types that are often unavailable in traditional markets.
In addition, with the advent of the regulatory framework and the infrastructure development in the fintech area, alternative investments provide investors with a safe environment and ample opportunities to increase the value of their assets through various strategies and tools.
