FinTech: you’ve heard the word thrown around, but what does it mean? In a world run by digital technology, new buzzwords are becoming part of our daily lexicon as quickly as the products that inspire them. FinTech is the future of financial processing and a term you should know as a consumer of loans, credit cards, and money management tools. We invite you to learn FinTech basics with our handy FAQ sheet.
What is FinTech?
FinTech is short for Financial Technologies. Just as it sounds, it describes technologies used and applied to expedite services in the financial industry. Financial institutions, credit card companies, and personal loan organizations are increasingly adopting FinTech to enable streamlined business practices. This technology makes accessing financial services and products easier and more affordable. In a way, FinTech is a great equalizer of financial service accessibility.
Likely here to stay and not just a fad, FinTech investments are climbing at a dizzying pace. A report by Statista shows that the total global FinTech investments skyrocketed from a mere $1.1 billion in 2008 to a whopping $33 billion in 2018.
What financial services does FinTech affect?
Forbes has mentioned that FinTech is quickly becoming a disruptive technology. Disruptive tech tends to eradicate traditional systems by replacing them with more convenient and effective processes. Like Uber has begun to replace the pizza delivery guy and Netflix has replaced the DVD rental store, FinTech is beginning to disrupt traditional financial services like payments, money transfers, loans, fundraising, and asset management. New FinTech applications are virtually everywhere: from credit card application processing and PayPal purchases to credit reports and crowdfunding.
How does FinTech affect small businesses?
If you have a hankering to run your own small business, from making macrame dog leashes to organizing an open-air produce market, FinTech could be your new best friend. Through crowdfunding, mobile payments, and instant money transfer services, small businesses can open up shop with just the help of a dream, a little peer support, and a smartphone.
Instead of waiting for a loan from the bank or struggling to produce collateral for approval, entrepreneurs can launch crowdfunding campaigns using platforms like GoFundMe or Kickstarter. FinTech is also a true equalizer when it comes to accepting payments. Farm stands in the middle of nowhere or web-based services two continents away can accept credit cards and debit cards with simple tools such as Square and PayPal.
How does it change the customer experience?
FinTech has also dramatically changed the world for customers and consumers. Anyone can immediately purchase services and access fast financial info, such as credit reports and loan applications.
Through recent, dynamic accelerations in technology, we have learned to expect instant services from a variety of retail companies and financial institutions. We can now make purchases with a credit or debit card almost anywhere, pay for rent using PayPal, and use our smartphones to pay for coffee. Soon, we could expect to pay with just our phones anywhere we go, disregarding the debit card as a dinosaur of yesteryear.
How does FinTech alter the loan application process?
We are glad you asked! FinTech is quickly becoming a big part of the personal and business loan industry. A prominent business economist, Eldar Beiseitov, has observed that FinTech is responsible for strong growth in the personal loan market over the last few years. According to Beiseitov, “Since 2013, much of the growth in personal lending is driven by loans originated by FinTech firms.” Between 2013 and 2019, FinTech-based personal loans climbed from 5% to 38%.
The reason for this is that FinTech makes it convenient, easy, and fast to secure a loan. Loan applications can be approved within minutes, whereas decisions can take 24 to 72 hours using traditional processes. Similar to how FinTech makes it easy to secure approval for credit cards, the use of this technology makes it easy for companies like LoanMe to offer personal and business loans to a wide range of clients.This digital approach also helps lenders streamline the loan process, utilizing a combination of more flexible underwriting models, slick mobile customer experiences, and automated customer acquisition strategies. Some lenders have completely adopted FinTech as their go-to system, initially making them a robotic all-digital company. Other companies, like LoanMe, use a balance of FinTech automation and real human interaction, support, and customer service to provide you a service that’s both expeditious and personable.
Discover today how the seamless digital technology and platforms that LoanMe employs allow you to get funds deposited directly to your checking account, potentially within a matter of hours. Call 844-704-0556 today or click here to apply.