WILL FINTECH COMPANIES BE RELEVANT IN ANOTHER 10 YEARS AND WHAT SHOULD FOUNDERS BE LOOKING AT?
David Lanre Messan
Venture Builder | Angel Investor | Board Advisor | Venture Studio Operator - Building and investing in AI startups.
Fintech — an abbreviation for Financial Technology — uses computer programming or other forms of technology to enable financial services. As such, fintech companies modify, enhance, or automate financial services for businesses or consumers, using technology. Examples include mobile banking, peer-to-peer payment services (like Venmo, CashApp), and automated portfolio managers such as Wealthfront and Betterment.
Fintech is changing how we save, borrow, invest, and move money, providing services such as payment gateways, mobile payments, consumer banking, budgeting apps, stock trading apps, blockchain and cryptocurrency etc. And as the world evolves away from traditional method of handling money, fintech is taking centre stage. But the question is, are fintech companies here to stay, or will they burn out eventually. Will they still be relevant in another ten, fifty years?
To answer this question, let's look at the developmental history of the fintech industry, using the key players in the industry as examples.
Though fintech seems like a recent series of technological breakthroughs, the concept has existed for a while. The first credit cards introduced in the 1950s were among the first fintech products available to the public which eliminated the need for consumers to carry physical currency with them. In 1998, PayPal was launched, representing one of the first fintech companies to operate primarily online — a milestone that has been further revolutionised by mobile technology, social media, and data encryption. We now have mobile payment apps, blockchain networks, and social media-based payment options due to this fintech revolution.
This brief history of the fintech industry shows that fintech has been around for quite a while. Although it is the trending thing now, it has been through some critical developmental phases. Through these, something that gives fintech the significance that they have is their ability to deliver convenience. Fintechs have created innovative ways to deliver convenient financial services to the market, meeting the market’s increasing need for comfort as it relies more on technology to get things done.
Even better, by democratising access to financial services, they are creating accessibility unlike traditional banking. For example, more people are likely to start first-time saving because saving is now automated. Likewise, people are likely to be open to lending now that fintechs are eliminating the barriers to access loans; they do not require collateral or a long list of documents, thereby making it easy for customers to borrow and pay back when due.
While there are questions about the survivability of fintechs, we must look at the immediate outcomes and future outlook to make judgements. From where we stand, we see many of the gaps it’s closing. For instance, Fintechs like Flutterwave and Alat have introduced virtual dollar cards so their customers can pay for services on international platforms; PayPal and Payoneer make it easy for remote workers to get paid for their services — with PayPal’s added advantage being its cryptocurrency trading feature. These observations bring confidence that fintech companies will continue to be relevant over the next decade or more. However, they need to keep developing and iterating their services to meet the market’s evolving need to retain their relevance.
To maintain the sustainability of the fintech companies, their founders must keep up with the market to understand it and how their product or service will be of benefit to them. As mentioned earlier, fintech companies will continue to thrive because of the ease and comfort they offer their customers. As time goes on and as the world evolves, what is comfortable today may not be comfortable in the next ten years. So, founders have to be abreast of their market and its changes.
From where we stand, fintech companies will maintain their relevance for many more years to come because the world is becoming digitalised and technology is replacing long queues and excessive paperwork. It is now up to fintech founders to position their companies for continued relevance.
领英推荐
?
References:
?