Fintech is a dynamically developing industry that includes elements of the financial services industries (banks) and modern technologies. Everyone is introducing new technologies, banking as a service, with all the innovations and the introduction of cryptocurrency into circulation, has ceased to be traditional.
In the Fintech market, tech start-ups and emerging companies are innovating on products and services that were previously offered only in the traditional financial services sector. Thanks to this, the Fintech segment is rapidly developing, violating the usual orders, goals and patterns.
Large companies that have been stripped of their monopoly on financial transactions and services are trying to stay in the game using the same methods. They are incorporating new technological solutions into their circuit, expanding their business and offering old services in new ways.
In addition, banks are expanding their business with young companies and start-ups, which they buy along with technological solutions. The volume of new technological solutions and innovations for financial institutions is constantly growing, but can the traditional business models of banks cope with such loads? Will they be able to solve security issues and take companies to a new track of technology?
It seems that cryptocurrencies are becoming an asset that even the most conservative banking structures are forced to recognize. Many world-famous celebrities are promoting cryptocurrency.
Another area where cryptocurrency is impacting the traditional banking system is CBDC (Central Bank Digital Currency). Simply put, CBDC is a digital dollar powered by a blockchain. Unlike decentralized bitcoin, CBDC is designed to be under the complete control of the national government.
Despite the rather dubious experience of Venezuela, which launched the first national cryptocurrency CBDC Petro, many countries continue to intensively develop their national cryptocurrency.
China is leading the way with its digital yuan, which has already been launched in several Chinese cities on a trial basis. The US Federal Reserve Bank is experimenting with the crypto dollar in collaboration with the Massachusetts Institute of Technology.
Neobank is a financial institution that operates only in the digital space. Buyers visit them via the Internet, physical services are not available. Neobanks are divided into two groups:
- licensed financial institutions capable of performing all banking functions;
- intermediaries that cooperate with offline banks and provide their customers with remote online services.
As the number of customers grows, fintech startups and neobanks will create their own ecosystems to strengthen their market positions. This will lead to the kind of competition that will make financial institutions and technology providers appear indistinguishable.