Fintech companies have three general options on how to proceed. They can focus on a niche service and become leaders, be acquired by a traditional player, or try to be a multi-service provider. The first one seems very likely and requires fintechs to work with traditional players. In a nutshell, fintech companies make financial services more accessible to the general public.
These services include traditional financial transactions such as savings, investment, and loan processing. But it also encompasses revolutionary financial technologies such as blockchain and cryptocurrencies. The growth of FinTech is largely due to the opportunity it offers small players to compete in the same field as traditional banks and financial institutions. Fintech outsourcing companies often offer better solutions than originally intended with a broader technology vision of the world and specific expertise.
More than 70% of fintechs said that a major challenge when working with traditional companies is that they lack agility, while traditional companies find it difficult to change their internal culture when working with fintechs. Therefore, the visual design language of your Fintech application must be well aligned with your business objectives and your target audience. FinTech companies are starting to partner with traditional insurance companies to automate processes and allow insurance companies to expand coverage. Fintech applications manage a lot of sensitive user data that comply with financial regulations and function as applications.
In response, financial institutions, such as banks and investment companies, are investing in fintech applications, with some allocating large portions of their budgets to research and development. For example, Apiax, a Fintech startup later recognized as the main financial product of FinTech50 and RegTech100, started as an outsourced minimum viable product (MVP). Outsourcing is the best option for FinTech startups and companies that want to develop product design as soon as possible, as there is no need to build infrastructure, hire and train resources, etc. Banks, fintech startups and large technology companies actively compete for customers in the financial market.
Although traditional institutions were slow to adopt fintech solutions, both startups and established companies are betting on digitized financial services. Fintech is an acronym for the terms “finance” and “technology” and refers to any business that uses technology to improve or automate financial services and processes. Join thousands of institutions and FinTech pioneers leveraging the best APIs, applications and financial data. Although the industry evokes images of startups and industry-changing technology, traditional companies and banks are also constantly adopting fintech services for their own purposes.
A UK banking IT professional told Computer Weekly that banks will inevitably engage with fintechs, either directly through acquisitions or indirectly through partnerships and investments. The massive growth of fintech companies and markets globally has led to increased exposure of vulnerabilities in fintech infrastructure, while making it a target of attacks by cybercriminals.