A recent article on Forbes entitled, “Three Reasons Fintech is Thriving“, brought up a few points about the recent growth and expansion of the Fintech market and some future predictions that come along with it.
Slow to Grow and Change
The article started with an overall analysis of the market which caught my attention when it brought up the point that technology and finance are typically at odds. One of the major points it brought up was that Technology is typically a fast moving industry focused on growth and new development, whereas finance is a much slower industry that changes primarily in response to improvements in efficiency, regulations and international and domestic financial climates.
The shift from traditional financial companies to those with more technology companies has begun to pick up pace as younger investors begin to accumulate wealth that was once nearly entirely concentrated in traditional financial services providers. Technologically aided financial services are not only affecting the consumer areas, but also in a business context where providers seek to reduce costs and increase value through technology.
Giants Still Control the Market
With all of the recent developments in financial technology, many would be surprised to learn that traditional providers have retained a large majority of the financial services market share. This has been done through a combination of organic developments along with a growth-by-acquisition strategy that has allowed the traditional providers to sweep up smaller, technology-driven firms to scale up and provide more value in their offerings. In addition to this, traditional service providers have expanded their market by developing products and services specifically oriented for small businesses and entrepreneurs.
Overall, the growth in the Fintech industry is exponentially increasing on many different facets. The future of the industry seems to be open to interpretation, but look for the traditional providers to seek to acquire smaller Fintech firms or face a loss in market share.
Source: https://www.forbes.com/sites/rohitarora/2017/02/22/3-reasons-fintech-is-thriving/#266f19da1017