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The world is currently experiencing the fourth Industrial Revolution, characterized by the adoption of personalized solutions that can be widely distributed without the need for inventory. Startups and Fintech companies are leading this innovative trend.
If the idea still seems unclear, we can provide practical examples from your daily life to make things clearer.
You are in a hurry for an appointment and decide to order food and watch a Netflix series while waiting for delivery, then use a transportation app to go to the meeting location and check your finances on the Bolso Guide app during the ride.
All these procedures were facilitated by firms that emerged solely due to the technological advancements of the 4th Industrial Revolution highlighted earlier in the text. You might be questioning the relevance of fintech in this narrative.
The most diverse markets have been adjusting to a new consumer profile due to the 4th Industrial Revolution. Similarly, the financial sector is also evolving in how it operates and engages with the public, with fintechs playing a key role in this new economic landscape.
Fintech: everything you should understand about this emerging trend
The fintech concept is broad, and this article aims to debunk it. You will learn why fintech is becoming a significant trend in Brazilian daily life.
First, we will learn about the origins of this new financial system.
How fintechs originated: a look at their history.
Many experts view PayPal as the first fintech, founded in the United States in 1998. It allows customers to make payments and transfer money without bank intermediaries. Fintechs gained momentum in 2008 following the global financial crisis triggered by the Lehman Brothers’ bankruptcy.
Now that you are familiar with the origins, it is time to fully comprehend the nature of these financial startups.
What do fintechs entail?
A fintech is a company that aims to transform the way financial services are provided by using technology.
A fintech is born from a strong desire to develop new and efficient solutions for the specific challenges faced by a target audience, setting it apart from other startups that may have a broader focus.
A fintech, being technology-based, can offer less bureaucracy, increased practicality, and more innovative solutions compared to traditional financial institutions. These user-friendly features have attracted a growing number of people to switch to this modern company.
The connection between financial technology firms and conventional banks
When discussing fintechs, many wonder about their impact on traditional banks due to the services they offer, which were once exclusive to financial institutions.
Banks are not likely to retaliate against new fintech companies in the financial market, as experts suggest that fintechs and traditional banks are learning from each other and coexisting.
Traditional financial institutions are also striving to innovate in response to the rise of fintechs, as evidenced by their efforts to enhance customer experience through initiatives like enhancing online banking, particularly on mobile platforms.
Due to the emergence of fintechs, it is predicted that we are moving towards a more favorable situation for user/client relationships and banking operations.
Explore this as well: Techfin: its definition and distinction from fintech companies
Fintech companies in Brazil: how solutions have appeared in the country’s territory
Brazil is now recognized as a strong contender in the fintech sector, with three of the world’s top 100 innovative fintech companies based there.
Investment in the sector has grown significantly between 2016 and 2018, leading to a sevenfold increase. As a result, the number of companies in the field has risen, with over 400 Brazilian fintechs now established, solidifying Brazil’s position as a leading country in Latin America for fintechs.
Benefits of financial technology companies: why are people so confident in them?
Fintech companies offer numerous advantages that have attracted many investors and users due to their unique qualities in the financial market.
Simplifies the financial experience for your users and/or customers.
The primary aspect is that it centers the entire concept on these financial startups: a fintech is established to simplify the financial experiences of its users and/or clients.
Provides more efficient solutions
Banks are often associated with difficulties and delays due to their bureaucratic processes, leading many customers to view them as a hassle. Fintech companies are stepping in to offer more user-friendly and efficient solutions that cater to the needs of a digitally connected society, providing online services that save time and eliminate traditional banking bureaucracy.
Place technology in the service of users.
Fintech companies utilize technology to cater to users’ needs more efficiently online, offering mobile-based services at a more competitive price than traditional banks.
Simplify everyday life
Previously, banks were associated with long lines, travel, and waiting times. Now, it is feasible to access equivalent services of better quality without needing to leave home. Similarly, fintechs have demonstrated that anyone can engage in investments, challenging the perception of cumbersome bureaucratic procedures.
Types of fintech companies?
Fintech companies specialize in specific functions, allowing them to provide higher quality services compared to traditional banks or agencies by dividing into different niches.
We will now explore some of the typical specialties that fintech companies can offer.
Fintech payment services
Payment fintechs in Brazil are currently leading the way by streamlining the buying and selling process to enhance payment methods like credit cards, debit, or prepaid options.
Financial management in the fintech industry
This kind of company focuses on managing accounts, offering solutions for controlling expenses and budgets, whether personal or business-related.
Fintech loan and debt trading
This offers a solution for individuals in search of a loan with more competitive and reasonable interest rates compared to those offered by conventional banks.
Fintech Investments: Investment in financial technology
Fintech companies have disrupted the exclusive realm of financial investment that was once limited to a specific elite group, using sophisticated algorithms to provide investment analysis and suggestions to users.
Fintech utilizing blockchain technology and bitcoin
The rise of bitcoins, or virtual currencies, should be associated with the fintech companies that enabled such transactions.
Insurtech Industry
Insurance fintech aims to evaluate various market options to offer users a comprehensive overview of available insurance choices, eliminating the need for individual company research.
Collective investment fintech
A collective investment fintech operates by involving multiple individuals in an investment opportunity, such as in real estate, which has significantly expanded within this sector.
Selecting the appropriate fintech for your needs
Choosing which financial technology companies to include in your daily routine depends on your objectives and investigation into the services provided by each company.
This is the perfect time to embrace more accessible, convenient, quick, and contemporary financial solutions as the new market model expands and solidifies. For instance, at INCO, you can easily become an investor with just a few clicks.
If fintech used to be a vague term, now it is clear and easy to comprehend!
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