How The Fintech Industry Is Reinventing Financial Services

From credit to currency, the new wave is sweeping over the old guard


The age of the credit/debit card may not be over yet but as per recent developments, customers seem to be adapting to the more efficient payment methods invented by the FinTech industry. In fact, based on the developments during the last few years, the FinTech industry looks set to spread its reach to new markets that initially seemed improbable.

Perhaps the question a few years ago, was whether online payments including mobile banking would ever replace traditional banking as we knew it. While a complete replacement may never be possible, players in the FinTech industry have had their say on how banks should deliver their services to consumers.

Many banks are now implementing online banking services while mobile banking is still at its early stages of adoption. In general, every mainstream banking institution out there has FinTech on top of its list of strategic priorities. Others have also embraced the possibility of working with third party FinTech companies in a bid to reaching out to the unbanked.

However, one of the most interesting developments in the FinTech industry has been the way startups have managed to identify different business segments that had completely been neglected by the mainstream banking institutions.

Insurance and credit

Right now, we have several platforms that provide unsecured loans while others like eLogbook loan have gained traction in the FinTech industry by offering online logbook backed-loan applications to vehicle owners. The FinTech industry is finding a foothold in the consumer-focused marketplace with several players launching their innovative products to try to disrupt the way mainstream players provide their services.

Another good example apart from eLogbook loan is trov, which is an application that lets people insure only what they value most. The application can easily be turned on and off on various items whenever necessary, thereby helping consumers to cut down their premium costs.

A similar product has been developed by a US company Metromile, which in this case allows motorists to pay insurance cover based on miles covered. Again, this is helping low mileage drivers to cut down on their insurance costs.

Insurance is one of the largest business segments in the financial services sector and based on recent developments, it looks as though innovations in the FinTech industry are about to make it significantly different from a decade ago.

On the other hand, the credit market is being redefined by products such as eLogbook loan, and several payday loans platforms. The traditional bankers have also shown increased interest in FinTech as they seek to keep pace with the change in consumer behavior.

Robo-advisors are the new asset management experts

Another big section of the financial services sector is the investment and stocks segment. While there are several individual investors/traders, most investments are still managed by institutional investors. As such, asset management is one of the most dominant services amongst hedge funds and mutual funds.

However, over the last few years, more fund managers have started to embrace the use of robo-advisors to help them in making their trades more efficient. A robo-advisor is an algorithmic trading software developed to trade on behalf of human trader. It is highly equipped with tools that helps it pick trades based on a number of permutations and analysis thereby making it autonomously efficient when it comes to managing trades.

While there is still a cloud of skeptics that criticize the use of robo-advisors, recent trends indicate that algo-trading has been more efficient than the traditional brick-and-mortar asset management. According to Business Insider Intelligence, robo-advisors will manage $8 trillion in global assets by 2020.

Based on these numbers, it would be ideal to say that through robo-advisors, the FinTech industry would be a common term in the investment community and most importantly, amongst portfolio managers.

Cryptocurrency and the impact of Blockchain technology

Blockchain is a network infrastructure that allows users to securely and simultaneously access transactions recorded by cryptocurrency platforms like bitcoin. This technology has gained milestones over the last few years, thanks to the success of Bitcoin.

Bitcoin’s success has triggered the launch of several other types of cryptocurrencies including Bitgold, which unlike Bitcoin has some value attached to it in the form of gold. It allows users to send and receive money in form of small units of gold. Users can also hold their funds in Bitgolds, which then appreciate based on the price of gold.

Now, with this kind of innovation, increased adoption by consumers could render all traditional currencies (including paper and coins) a mere alternative in the foreseeable future rather than the primary currencies they are today. This would have a massive impact in the financial services sector and FinTech will once again take the plaudits for being the prime disruptor.


In summary, the FinTech industry is becoming part and parcel of nearly every aspect of the financial services sector. Some segments have been slow to adapt to the changing environment, but based on recent trends, things could change soon.

It is an interesting space to watch as tech giants and large banking institutions fight to beat off the increasing threat of disruptive startups.  


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