How can you avoid common myths about Financial Technology?

Also, non-technical backgrounds, such as psychology, behavioural economics, and user experience design, play a vital role. These experts apply their knowledge to make fintech solutions more intuitive, engaging, and effective for a diverse user base. Their contributions are important in designing interfaces and experiences that cater to varied customer behaviours and preferences. This interdisciplinary collaboration underscores the fact that fintech thrives on a mix of skills and perspectives.

Technology, and FinTech in particular, has the power to create entirely new ways of exchanging value. There is a significant emotional, social and creative element to envisioning an entirely new way of doing something. As we are seeing with AI, computers can make life a lot easier, but it’s the human touch and creativity that makes it impactful in society.

In today's consumer-driven landscape, the vast majority actively seek streamlined payment processes and flexible methods. Contrary to the myth that fintech is exclusive to tech-savvy individuals, it caters to a broader audience, including those with expertise in finance, business, marketing, and customer service. The essence of fintech lies not just in technology creation but in problem-solving, addressing customer needs, and delivering value. The satisfaction derived from fintech solutions is deeply intertwined with their ability to simplify transactions and enhance the overall consumer experience.

Once in an open forum a banker commented to the fintech's players that they are unable to understand the language we speak. Fintech is nothing but the inclusion of technology in traditional banking system, as we included mobile phones to our part of daily communication. If someone can understand the gap of tech in the traditional system, there tech evolves, irrespective of the field.

This is definitely a misconception. For example, I have been in the fintech industry for 20 years with no technical background. We definitely need technology and knowledgeable people In that space to build a product that solves a problem for our clients. However, to understand what problem we are solving or how we help our clients we need knowledge about our clients workflow and sector!

Though direct to customer services like digital banking, ATM's, mobile apps are operational for more than 2 decades, until 2015 mostly banks or financial institutions were only doing the back office operations for any banking related transactions either directly or indirectly. When external entities started supporting banks on operational activities like KYC, Lending Process, Credit Scoring, trade finance, etc by bringing in technology which are typically startups, there was a misnomer that fintech is only for startups. Later Banks started collaborating with these technology enablers to fulfil the operational needs in faster and efficient ways which paved way for growth of Fintech organizations.

Innovation can either sustain or disrupt existing markets and players. Fintech is often thought of as disruptive because many noteworthy case studies are startups introducing tech that expanded a market or offered a low-cost alternative. For example, as I wrote in my book “The PayPal Wars,” PayPal was disruptive because it expanded the market for online payments to include SMBs and individuals. But in truth fintech innovation also serves to benefit incumbents in many ways. Consider AI’s ability to be applied to financial services. AI promises to cut fraud losses, identify credit-worthy borrowers, and impact numerous other use cases that will help banks and traditional firms improve their existing business practices.

Fintech is not something which stands alone, it is part of the banking systems which makes it constructive. Basically fintech's try to understand the problem and help the banks solve it with the inclusion of tech. The evolution of credit cards and payment technology is one of the greatest example of fintech inclusion, from cardboard to plastic, zip-zaps to NFC & UPI(in India).

The biggest myth about Fintech has to be that about the markets that it serves. Take India for example. India introduced UPI, the real time account to account payment mechanism back in 2016. At 0 cost! That served us very well during COVID when , be it releif work or government side, UPI became second nature to us. In fact the widespread adoption of UPI is now acting as a segue for people to explore other payment products. Like credit. And providing an easy distribution channel for Fintech players. This despite the country having a lower internet penetration, and financial penetration than developed markets !

Dispelling the notion that fintech is exclusive to developed markets, the availability of a substantial $30 billion BOS (Banking as a Service) emphasizes its applicability in emerging and developing economies. Fintech is not confined to regions with advanced infrastructure; instead, it thrives in areas with unmet financial needs and opportunities. Beyond mere service, fintech plays a crucial role in empowering and enabling communities globally. A comprehensive, inclusive perspective is essential, ensuring that fintech addresses not only economic but also social and environmental challenges.

Understand the limitations: Fintech solutions may have limitations, just like any other technology. Recognize that while fintech can provide numerous benefits, it is not a panacea and may have its own challenges or constraints. Be realistic about what fintech can and cannot achieve.

In my experience, contrary to the misconception that fintech is exclusive to developed markets, we are witnessing its real-time transformative role in Latin America (LatAm) and Africa. Fintech, particularly through mobile money solutions, addresses challenges in these regions by providing accessible financial services and fostering economic participation. Beyond bridging traditional banking gaps, fintech's inclusive nature combats financial exclusion and contributes to transparency. In LatAm and Africa, where a significant population remains unbanked, fintech stands as a strategic force, debunking the myth that it is confined to developed markets.

Basically to increase conception of the money, one should have an efficient operating system behind, like CBS, LMS, Real time payments,Compliant or Dispute management systems. So fintech evolved to support businesses for providing better experience & service to their consumers.

Contrary to the myth, fintech extends beyond consumer-centric functions; it's equally vital for businesses aiming to optimize, automate, or scale financial operations. The growth in the Balance of Share (BOS) underscores fintech's role in transforming and enhancing business models. It's not merely about facilitating transactions but demands a strategic, analytical approach that harnesses data, insights, and intelligence for comprehensive financial advancements.

No, It’s not true at all. While fintech has certainly served consumers with services like mobile banking and payment apps, it also plays a crucial role in transforming financial services for businesses, improving efficiency, and driving innovation in areas such as lending, insurance, and wealth management, etc. An example of fintech in the business sector is the use of automated lending platforms that streamline and expedite the loan application process for SMEs, enhancing access to capital and financial services.

Engage with industry experts: Connect with professionals working in the fintech industry, whether through networking events, online forums, or industry-specific communities. Engaging in conversations with experts can help dispel myths and provide you with accurate insights.

In my opinion, if fintech is the future, we're already living in it. Its impact is palpable in the present, exemplified by companies like Square and PayPal, which, despite being deeply embedded in our lifestyles, are, in fact, fintechs, not traditional financial institutions. Alongside these established players, emerging platforms like Robinhood are revolutionizing investment accessibility. Fintech goes beyond prediction; it actively shapes the current financial landscape with a proactive and visionary approach, responding to the evolving needs, expectations, and behaviors of today's financial ecosystem.

Many of us might have heard the term embedded finance. its nothing but the inclusion of financial services to the non financial sector. Payment gateways and QR code based payments sets the biggest example, where it enabled the fast payments to most of the offered services we get. The invention of UPI in India by NPCI, is one of all times, where the real payments were made so simple.

To avoid common myths about financial technology, stay informed by relying on reputable sources, question assumptions, and seek diverse perspectives. Understand the technology's capabilities and limitations, separating fact from fiction. Additionally, engage with industry experts and stay updated on the evolving landscape of financial technology to make informed decisions. An example of a common myth in financial technology is the belief that blockchain is entirely anonymous. In reality, while transactions may be unidentified, they can be traced, and privacy depends on the specific blockchain design. It's important to verify information and understand the nuances surrounding technology.