The future of FinTech
In case you haven’t noticed, FinTechs (short for financial technology) are moving in fast on the traditional financial services world – or at least they’re trying to.
You’ve already been swept up in the FinTech revolution if you use a bank app or contactless credit card chip, pay in Bitcoin, transact with PayPal or take part in crowdfunding or peer-to-peer (P2P) lending.
The FinTech movement
The idea behind FinTechs is to cut out the middlemen, streamline the process, and give customers a better experience than what’s traditionally been on offer from the banks, which, among other shortcomings, can still take a few days to process a simple electronic deposit.
The thinking is that millennials (people born between about 1980 and 2000) entering the marketplace who were reared on the customer-centric approach of tech giants like Google, Facebook, Apple and Amazon, increasingly won’t accept anything less than the same on-demand service when it comes to banking.
It’s no secret that the traditional banking industry’s commitment to customer-centricity has long hovered somewhere between minimal and non-existent.
The FinTech movement is also about setting free the innovators and driving more business in one of Australia’s most vital industries – financial services. A lot of local entrepreneurial types are looking for a piece of the action.
FinTech innovation in Australia
In fact, FinTechs may have become the poster boy for the government’s much ballyhooed commitment to innovation, to the extent that the regulatory barriers have been lowered so the innovators don’t get gummed up in red tape.
As Treasurer Scott Morrison puts it, the government has set the stage so FinTech innovators can be “frictionless through their scale journey”.
There are a lot of FinTech journeys underway out there. The appetite for financial technology in Australia – along with the talent for creating it – is on the high side compared to more populous FinTech-focused countries like Germany and the UK, and regulatory barriers here are comparatively low. The industry employs somewhere around 10,000 people in Australia.
Competing with banks
FinTechs are certainly in competition with other FinTechs, but the real competition is the established financial service industry, epitomised by the big four banks. Consumer banking is where FinTechs aim to cause the most disruption – and many would say it’s an area where disruption is long overdue.
And the FinTechs – or at least those not already owned or sponsored by the banks – seem to be coming at the banks from all sides. One recent startup, Spriggy, is out to grab its fair share of the kids’ bank accounts market, for instance.
The app allows parents to handily park their children’s pocket money into a linked account and prepaid card, rather than having to schlep the coins and notes over to a bank branch.
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Source: FinTech loans and payments and other financial technology – Choice.com.au
