➤ Why Is FinTech The Future Of Finance? 🤔 (2024)

FinTech is a phrase used to identify a rapidly expanding sector of the economy that aims to provide financial services in a more comprehensive, effective, and creative manner via the use of potent online tools made possible by "Big Data" and Cloud computing. FinTech companies have started providing access to loans, insurance, and investments after initially entering the market as web-based payment systems (PayPal, Alipay, Apple Pay). Banks, other fintech solutions providers, regulators, and other parties must act in response to FinTech, which can be a significant dominant innovation.

In this blog, we'll look at how advances in FinTech are shaping the financial industry's future and how businesses and emerging markets of financial might profit from it.

What you will learn from this article:

  • What specific technological advancements are driving the growth and innovation in FinTech?
  • How are regulators and traditional financial institutions responding to the rapid growth and development of FinTech companies?
  • What are the main security challenges faced by the FinTech sector, and how are they addressing these issues?
  • How is FinTech facilitating increased access to financial services?
  • How is Big Data being utilized by FinTech companies to revolutionize financial services?
  • What are some of the key predictions for the future of FinTech over the next decade?

Table of Contents

What is FinTech?

What is influencing the growth of FinTech?What are the benefits of FinTechWhat FinTech can offer

What is the future of FinTech?

Businesses Will Go VirtualBusinesses Will Connect Directly To CustomersService Will Be More Affordable, Faster


What is FinTech?

The term "FinTech" is used to refer to any technology advancement in the financial industry, including emerging technologies created by new businesses or individuals as well as advancements intended for the back end of well-established financial institutions. FinTech companies have received praise for boosting competition in the financial sector, opening up new prospects for underserved consumers and enterprises, including those with poor credit scores and microenterprises, and fostering innovation by increasing IT expenditure.

The innovation between conventional and FinTech is one of the most obvious contrasts. Considering how long these institutions have been, traditional banking frequently doesn't adapt rapidly. Comparatively, the FinTech industry uses modern technology like cloud computing and artificial intelligence to develop new goods and services.

What is influencing the growth of FinTech?

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Feasibility, convenience, and accessibility drive more demand for FinTech. Fintech has grown to 22.17% CAGR and reached USD 305.5 worth. The growth is unpredictable as many companies still invest in financial software development and services. FinTech is safe as people prefer to pay via card instead of carrying cash in their pockets. Here's a brief of what factors are influencing the growth of FinTech.

  • The need for simple, safe, online payment systems has grown dramatically along with e-commerce.
  • There are sizable, neglected communities all over the world that have little to no access to banking or financial services. This serves as a potent barrier to both social progress and rapid economic development. FinTech could be well suited to fill these gaps.
  • FinTech businesses can choose which financial services to give to which customers and how much to charge for those services because of the enormous volumes of data that are made available via e-commerce transactions, social media, and internet searches. For these providers, data now has a higher priority than collateral.
  • The development of FinTech seems to have eluded regulators, who do not seem to have been able to keep up. This is preventing established, regulated financial institutions from directly competing with these new competitors, allowing FinTech enterprises to develop rapidly and possibly accept risks that their users are not fully aware of.

What are the benefits of FinTech

Here’re some of the best benefits of FinTech technology:

Customer Services And Revenue

By boosting production and efficiency, FinTech enhances the quality of conventional financial institutions. There are greater chances when FinTech companies are viewed as allies rather than competitors by banks and credit unions. Additionally, businesses' customer retention rates will undoubtedly grow as a result of providing better and more modern services, leading to greater profits.

Cost Reduction

When you adopt cutting-edge technologies, you might assume that it would cost you a fortune, but this isn't always the case. FinTech businesses put limits on how much money they can spend on technology. However, such is not the case with financial technology; instead, it would help to bring down total expenses.

Through the use of FinTech, the integration of bank account cards and customer ids has enabled the integration of physical and digital payments into a single platform. Businesses primarily benefit from the way they provide practical transaction alternatives on a tight budget.

In reality, these technologies enable businesses to send and receive money in several currencies from their accounts without paying huge conversion costs. The strength of financial technology lies in convenience, not price.

Higher Convenience

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As we said at the outset, providing ease is more important to the financial industry than spending money. The most practical approach to running a banking company is through the use of FinTech software in enterprises. FinTech is being embraced by businesses because it makes use of technology to provide users with a better and more dependable customer experience. Blockchain, AI, IoT, machine learning, and numerous more financial technologies that will help them in the long term are the technologies that are improving financial businesses.

FinTech has simplified many financial operations by putting convenience at users' fingertips. The banking industry and insurance firms have prospered in these turbulent times by providing cutting-edge new technology.


Any online loan application must be approved by lenders that exclusively operate online and can offer same-day funding, a capability made possible by FinTech innovation. FinTech makes it simpler to secure a payday loan or other short-term loan. You can easily receive speedy service and find a variety of lenders online. Traditional banks might not have the same benefit and it would take them months to complete the task quickly. FinTech is a clever, efficient, easy, and quick method, which is why most organizations choose it.

Faster Rate of Approval

The majority of the banking system should focus on the rate of approval since it is a differentiating characteristic. But since FinTech was introduced, this procedure has become simpler. It is quite apparent that you can seek a digital lender online, and the application approval process often takes a day. Customers' information is processed, and they can obtain any sort of financial service they require. It is credited to the automated procedure made possible by the banking industry's usage of AI, which is anticipated to advance the process more quickly than a person could.

Read also: How To Measure The ROI Of A Custom Software Project

Robo Advisors

One of the newest and most significant FinTech subsectors is Robo advising. Companies offering these services question customers specifically and use sophisticated algorithms to create an investment plan that is specifically tailored to them. The norm is that there is no required minimum deposit to open an account when you begin investing, and financial advisors are free to select affordable assets. Make a later payment for the services based on the assets you brought or intended to keep. Asset allocation and balancing are free of charge. Additionally, it is among the easiest methods for preparing an investment or long-term banking strategy.


FinTech technology can provide effectiveness in addition to the other visible benefits, which is an unstated advantage. FinTech is renowned for making processes more efficient. Using financial technology makes you more effective since it offers incredibly specialized services.

Automation provides a high degree of specialization since it excludes the involvement of people. It, therefore, has a high level of productivity and service quality. We are a FinTech company that can be both efficient and flexible at the same time. FinTech makes it possible for you to invest in solutions for many causes, but the outcomes are clear-cut: increased productivity and better time management.

Financial, Governance, Risk Management, And Compliance Expectations

FinTech has become widely accepted by all users and is not something that is started by an entrepreneur. Among the regulatory requirements and expectations for access to FDIC-insured deposits and the banking system are regulatory actions that assure sound finances, governance, risk management, and compliance abilities that lower risks to the government security net and potential harm to clients.

Advanced Security

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Regrettably, security is among the main barriers to embracing FinTech. Even if FinTech has many benefits, it still has to make it clear how it provides a high degree of security. Keep in mind that a single security breach, cybersecurity intrusion, or data theft puts any FinTech company with limited security experience one step closer to extinction.

The consequences of this security breach may be too great for smaller organizations to handle financially and personnel. Due to this, FinTech businesses frequently make large expenditures on their offline as well as online security infrastructure. Clients may thus rest certain that the information they provide is safe.

Read also: Cybersecurity in Fintech and Crucial Cybersecurity Factors for FinTech Platform

What FinTech can offer

The biggest effects of FinTech on underprivileged groups are credit availability and platforms for digital currency transfers. In addition to these, FinTech provides services that have changed and are still changing the financial services sector.

Access to credit

By offering alternatives to conventional financing techniques, FinTech can assist small and medium-sized businesses (SMEs) in getting access to loans and delivering services in remote locations.

An outstanding illustration of this is Ant Group, a Chinese FinTech business that significantly impacted consumers' and business owners' access to credit. At its height, Ant had more than 1.2 billion users and processed 110 trillion yuan in payments ($16 trillion), which is more than 25 times as much as PayPal in the United States.

Starting as a payment option on Alibaba's e-commerce platform, the business went on to become the industry leader in mobile and online payments, offering credit options to smaller businesses on Alibaba.com and allowing customers and merchants to borrow money from banks on their cellphones.

Digital cash transfer platforms

Platforms for digital currency transfers are now widely utilized around the globe. These can be especially helpful for migratory workers, whose families, who sometimes lack banking services, depend on getting money from outside.

Digital wallets

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Through the use of digital wallets, users can conduct transactions online without using conventional banks. Digital wallets accounted for half of all worldwide e-commerce transactions in 2020, according to industry data source Statista. Payments from merchants, peer-to-peer transfers, international money transfers, bank accounts, loans, and cryptocurrency trading can all be done using a consumer digital wallet.

Global payment networks

Global payment networks provide consumers and businesses with the ability to easily conduct international business and use digital mobile devices, creating new prospects for businesses. By automating business-to-business payments, they may also improve general efficiency and working capital management for companies of all sizes.

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What is the future of FinTech?

FinTech has increased dramatically during the past ten years. It alters company operations as well as payments and investments.

Therefore, it should come as no surprise that several forecasts have been made regarding what the future of the financial technology sector may bring.

The 10 forecasts for the future of FinTech that are listed below may appear cautious given the quick developments that are now occurring.

Businesses Will Go Virtual

Almost all commercial and financial transactions will soon be carried out online, as we are now doing. Even though many individuals throughout the world who were previously excluded from banking and finance because of physical or logistical obstacles are unconcerned by this, others may not be. And so do the financial institutions and commercial enterprises that may now entice these individuals to become clients.

Although the pandemic has contributed to the acceptability of internet services, developments in artificial intelligence (AI), automation, and cloud computing will also be beneficial. Financial institutions and companies will be able to more precisely match clients to the goods and services that are best for them as a result of algorithms that are becoming ever more simplified. This will be done without either side having to put in countless hours of tedious paperwork. Find out how ai is used in fintech and what AI Solutions can enhance your fintech platform and which can damage it?

Access to bank accounts, insurance, and loans will continue to improve. Existing wealth will no longer be the deciding factor in whether families can use these financial tools to generate wealth.

Businesses Will Connect Directly To Customers

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Geographical restrictions have determined access to practically every commodity and service imaginable, not just banking and financial services. Historically, a person's capacity to purchase and sell has been restricted by their physical access to commercial premises, foot traffic, transportation, and other factors.

Delivery services and online storefronts gradually increased accessibility for small companies and consumers who lived in remote areas. The unexpected need for farmers and fishers to discover new ways to contact customers directly as opposed to depending on eateries, cafeterias, and grocery shops to buy and sell their products resulted from the closure of public venues. Since physical shops and regular foot traffic were no longer determining factors in who consumers bought from, small companies found themselves suddenly on an even playing field with famous names.

Direct sales have transformed the condition of financial education; scattered networks of certified financial educators made working-class families more accessible to the knowledge of how to operate inside the banking and finance institutions, which was previously largely denied to them.

Read also: Synchronous Vs Asynchronous Programming - What’s The Difference?

Service Will Be More Affordable, Faster

The adversary of work today is automation, and in some respects, that perception is justified. Nevertheless, at what point does automation pay for itself?

One such instance is the development of FinTech. Millions of clients throughout the world will gain from this transformation since they will no longer be dependent on the labor of human administrators to access financial services, even though the necessity for administrative labour may reduce as a result of developing automation.

The overall cost to manage advanced finance choices will decrease as algorithms become capable of doing tasks that previously required a workforce of human workers. This implies that more individuals will have access to these services. Some former loan administrators may have success launching new enterprises with loans that are automatically handled.


Regulators and central banks alike have noticed how quickly the financial landscape is evolving. The expansion of the financial services industry has increased the complexity of their work. In order to thwart the entrance of newcomers into their domain, they will need to adjust, just like established banks will.

The "bottom two billion"—the world's poorest people—will not all be able to escape poverty on their own thanks to FinTech. But if it can reach some of them and provide them with access to financial services, economies will probably profit, and the businesses that break into this market segment with a well-thought-out plan should have a promising future.

We think the disruption could open up investment possibilities in both the conventional banks and financial services firms that successfully adopt this new paradigm as well as in the FinTech startups that succeed in gaining traction.

Selleo excels in developing high-performance FinTech apps and delivered them to many clients in the past. If you have anything to discuss, please contact us now!

➤ Why Is FinTech The Future Of Finance? 🤔 (2024)


➤ Why Is FinTech The Future Of Finance? 🤔? ›

FinTech has simplified many financial operations by putting convenience at users' fingertips. The banking industry and insurance firms have prospered in these turbulent times by providing cutting-edge new technology.

Why the future of fintech is embedded finance? ›

Embedded finance is the integration of financial services into the offerings of non-financial companies. This innovative approach allows businesses to provide seamless financial solutions such as payment processing, loans and insurance directly within their platforms.

What is the future of the finance industry? ›

Fintech innovation in payments, digital currencies, tokenization of assets and AI are likely to play a key role in how the financial system, regulation and policy evolve – and who the likely winners will be.

Why is fintech so successful? ›

One of the key drivers of fintech's success is its ability to streamline processes and reduce costs. By eliminating the need for physical branches and manual paperwork, fintech companies are able to offer financial services at a fraction of the cost compared to traditional banks.

What is the future of fintech in 2024? ›

2024 will be a year of transition in Fintech

As Fintech evolves into a smaller, more efficient landscape, winners will emerge with enhanced products and capabilities, injecting even more efficiency and continual value creation into the financial services ecosystem.

Does fintech have a future? ›

McKinsey's research shows that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2023 and 2028.

How fintech is changing the financial industry? ›

Fintech is bringing about change by making it easier for underbanked and unbanked populations to obtain financial services. Access is being democratized through fintech at a level that has yet to be seen through traditional banking methods.

How is fintech changing the world? ›

FinTech offerings help businesses bring new access to their customers. Businesses can provide customers with intuitive software interfaces, positive user experiences, fast internet bandwidth and more. Customers can access financial information and transactions in real-time on mobile devices or computers.

What is the difference between finance and fintech? ›

Fintech Startups: Driving innovation and product development. Traditional Finance: Spearheading digital transformation in banks and institutions. Data Analytics: Analyzing financial trends and informing strategic decisions. Blockchain & Cryptocurrency: Expertise in these revolutionary technologies.

How is the future of the finance industry evolving? ›

From personal finance to commercial banks, digital advancement and increased financial technology is rapidly transforming the financial sector. And two trends in particular that are driving this digital evolution are: tapping into a huge gig worker opportunity and the growing influence of big tech companies.

Why do people prefer fintech? ›

The fintech industry is a realm of endless possibilities, where finance and technology converge to redefine how we manage money. From promoting financial inclusion and democratizing finance to fostering innovation and collaboration, fintech provides ample reasons to fall in love with the industry.

Why is fintech so cool? ›

Fintech offers banking services to people in remote communities. Mobile banking and digital payment platforms are bridging the gap for those far from bricks-and-mortar banks, offering essential services like money transfers, bill payments and savings accounts.

What are the 4 keys of fintech? ›

I've become adroit at answering and always say that, “In most cases, fintech is built with an aggregate of 4 pillar technologies: Social, Analytics, Cognitive and Blockchain.” These four technologies are used in varying measures to create most of the fintech that you use or read about.

What is the future of work in FinTech? ›

Present Status. The fintech sector is expanding at an impressive pace worldwide. In the United States, for instance, the industry is projected to create over 200,000 new jobs by 2025, highlighting the substantial growth and job opportunities in this field. In India, the fintech sector has been experiencing rapid growth ...

How quickly is FinTech growing? ›

The largest market will be Digital Assets with a AUM of US$80.08bn in 2024. The average AUM per user in the Digital Assets market is projected to amount to US$96.05 in 2024. The Digital Assets market is expected to show a revenue growth of 17.38% in 2025.

How fast is FinTech growing? ›

The market is project to grow at a CAGR of 19.50% between 2021 and 2028. North America was the leading regional segment of the Fintech in 2020.

What is embedded finance in fintech? ›

Embedded finance is the integration of financial services into non-financial offerings. Examples of embedded finance might include an e-commerce merchant providing insurance, a coffee shop app that offers 1-click payments, or a department store's branded credit card.

How is embedded finance the future of the economy? ›

Embedded finance revolutionizes B2B payments by integrating financial services into the operational platforms and systems that businesses already use. This integration eliminates the need for businesses to rely on traditional financial institutions or separate payment processing systems for managing their transactions.

What is the difference between embedded finance and fintech? ›

While embedded finance is about integrating traditional financial services into non-financial services companies' buying experiences, embedded fintech offers a seamless experience for users to work within platforms they are already using.

What is the prediction for embedded finance? ›

2024 Will See Embedded Payments and Finance Grow

Embedded solutions are on track to dominate the payments space within the next decade. As 2024 unfolds, expect more ISVs to roll out payment services and more payments companies competing to become backend providers for this important emerging market.

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