How fintech is disrupting the banking industry

Let’s face it – we just don’t our trust banks anymore

The finance and banking industries are undergoing massive changes. They have been for quite some time now and due to the introduction of technology into the financial sector there have been so many huge changes that if the conventional banks don’t sit up and take notice, and follow suit, then it’s not going to be much longer until they’re far less relevant in our daily lives, if not obsolete even further down the line, and what do we say? Good riddance. Especially when the alternative is looking so attractive, so much cheaper and so much easier to use.

From every time the banking sector has hit the mainstream media it has given consumers another reason to despair of how the banks and the government are failing to provide a system we can believe in – and it’s not just the regular consumer, those working inside the industry also see that the banks are in danger with the introduction of so many trustworthy alternative options, there are so many new alternative ways to control your finances, to buy and spend, and all without needing a bank at all.

The disruption is not only coming, it’s already here. Fintech companies are making their mark everywhere and huge profits too in this industry where the banks have had life too easy now for far too long.

In the past few years fintech has changed the face of banking and finance dramatically. The basic elements of blockchain, AI and big data alone have given consumers faster, safer and more efficient ways to buy and spend and in turn financial products and services are becoming less expensive and more affordable to everyone.

Disruption

Now the disruption has firmly begun the bank executives have been forced to accept where the industry is heading and either change with the times or be swept by the wayside. If they don’t invest in fintech too they know they’re going to get left behind, and with thousands of fintech start-ups and established companies with billions being invested into their growth they’re already moving forward at a terrific rate the banks are already playing catch-up.

Who have been influential in the disruption of traditional banking so far?

Automated payment efficiency

A real growth area in the finance and technology market is the automation of payment. Automated payments means less human labour and cuts costs dramatically. Currencycloud and Autobooks are both big players utilising APIs that users can customise to their own specific needs including such options as group and advanced payments. Currencycloud specialise in international transactions due to the globalisation the internet is bringing to supply and demand and Autobooks is finding better ways to interact with smaller bank clients and gathering data as it does in order to identify new realistic and healthy lending opportunities.

AI advisors

Not the only fintech company operating in this area but certainly one of the most impressive so far is Kasisto who have developed an artificial intelligence system that interacts with its consumers via messaging and mobile apps, it then provides its investors with specific industry recommendations.

The blockchain

Where bitcoin digital currencies were once topics of speculation in how they might affect how we control our finances they are now a reality. The blockchain has created a transparent secure system, one with little or no costs to spending online and which is also becoming a reality in the real world too; your bitcoin wallet software easily being utilised by bitcoin friendly vendors with the technology to make the exchange. New and futuristic ways to pay are being brought into the mainstream due to developments in blockchain technology by companies such as Digibyte and BanQu, all providing a new and healthy option to traditional currency and banking.

And who might make a big impact in 2018?

Fintech start-ups across the board are just as likely to make big impressions in the coming year, the following are just a small handful who have already begun to make their mark and look set for becoming more successful in changing how we look at traditional banking and finance solutions through the following year.

Cambr 

Cambr offers a new digital banking platform that is driving innovation. Its been created for developers in mind and wants to change the banking industry. The plantorm allow you to create and managed DDA and savings account, isses and process physical and virtual debt card seamlessly and also offer rapid and efficient payments via ACH and even P2P.

Xendit

Xendit have developed payment-processing systems including transfers, card payments, organising invoicing, payroll and P2P loans while constantly working on detecting fraudulent operations throughout the process. By improving the efficiency and with a fast growing reputation for their impressive product they’re definitely a name to watch this coming year.

N26

German fintech company N26 have been dubbed as ‘banking by design’. A new customer can open an account in minutes, take control of all of its features via their phone and spend in the real world using their N26 Mastercard with none of the usual Mastercard charges.

You can lock your Mastercard at the click of a button, check your payments, set limits, organise your security and receive personal spending reports and real-time notifications, all from your phone. They’re currently rolling out this system through most of Europe and will be heading into the United Kingdom and the US very soon.

Wyre

Offering an international foreign exchange system that offers cross-border payments in under six hours, it is significantly faster than both existing SWIFT or bank wire transfers. Wyre has assisted hundreds of asset management and liquidity providers in saving valuable time.

Simple

Simple is an FDIC-insured US checking account designed to help you save and consider how you spend with smart tools to help you budget. It is a fee-free branchless mobile bank system. You set your goals of the things you want to save for and Simple will help you not only cover your bills and expenses from your income but then organise what’s left and how much to put aside each day to save for your bills, boat, holiday or house! And from the balance it will tell you what you can safely allow yourself to spend each day without heeding your saving progress.

Simple are now a big player and getting bigger – they processed $1.7billion in a single year and 2018 is looking like they should be doing more than ever.

Xero

This cloud-based accounting software provides its users with cash flow process insights, payments accounting, invoices and the range of accounting services SMBs will require. With its sophisticated range of desktop and mobile apps plus a range of third party support Xero is looking very big for 2018.

Earnest

Using automation, clever design and the science of data handling Earnest is giving its users the ability to manage their existing finances while creating new opportunities for better interest rates and favourable banking options which suit their own personal financial position and activity. It considers the clients credit score and looks for ways to refinance loans with better payment options and charges. With over $100million in funding they’re moving into the industry under high expectations.


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