FinTech is a rapidly developing industry that has redefined the collaboration between financial services as well as the latest technologies. Banks that are currently employing FinTech for their long-term prospects are capable of witnessing development success and increased competitiveness across every area.

According to a recent report, the global FinTech market was valued at $194.1 billion in 2022 and is further expected to reach $492.81 billion by 2028, thereby witnessing a total CAGR of 16.8% from 2022 to 2028.

The latest statistics simply imply how FinTech is an emerging force that is all set to bend the rules of the banking sector and offer some extraordinary end-to-end banking solutions wherever employed.

This powerful engine of economic progress has increased the influence of technological advancement in the banking sector, all thanks to the onset of the global pandemic, which has further positively impacted the speed and flexibility of this banking industry.

Now, before diving into how FinTech is working towards an end to end banking solution, let us first take a look at a few reasons why FinTech is on the rise in 2023. You must comprehend that a dedicated FinTech app development company can offer you the much-needed perspective if you wish to invest in the same for your business and retain your customers for the long run.

Why is FinTech on an unstoppable rise?

The rise of FinTech in the banking sector is greatly determined by the weaknesses of traditional banking, and that is something we all have witnessed in the past few years. Below are a few reasons why FinTech has surpassed traditional firms:

• Hundreds of compliance rules have made traditional banks rather strictly regulated as well as rigid.

• Traditional banking usually leads to higher operational costs considering they have multiple brick-and-mortar branches across the country.

• Traditional banking doesn't go beyond the business constructs as they often have to answer the public. Now, this prevents them from making way for increased disruption by launching and implementing new technologies.

• Banking operations are backed by lower customer engagement.

• There isn't any investment opportunity lying in the street just for innovation and technology.

• Traditional banks don't offer much heed to offering individual profit-making products.

Now, FinTech has revolutionized the two constructs that have kept traditional banking alive for so long, and those two constructs are- lending and payments.

• Now FinTech firms have made borrowing and lending money easy for even small and medium businesses, thereby creating a win-win situation for all the participants. Their peer-to-peer model of lending allows participants to lend and borrow money in real time, thereby offering easy tracking, access, and security. 

• The increasing use of smartphones and easy access to multiple data networks has disrupted the most important aspect of traditional banking, and that is payments. Now the users won't have to offer huge bucks to the intermediary and make easy transactions within a matter of minutes, just with the help of a few clicks here and there. 

Now that you have looked into how FinTech is on the actual rise, it is now time to move forward and understand how FinTech is working for end-to-end banking solutions.

How is FinTech changing the norms of end-to-end banking across every sector?

Digitalization

One sure-shot way that FinTech is changing the face of the banking system is by abandoning the entire concept of brick-and-mortar banks. Now modern FinTech solutions available across every smartphone allow users to transfer money to and from the accounts, communicate and get instant help with the help of chatbots, and use various investment and loan calculators. All this can be done with a single device without the need to visit any bank. This has further allowed banks to save money by not funding many additional branches just to offer support to their customers when it can be simply done online. In addition to this, FinTech has also helped banks tackle the issue of cybersecurity by enabling multiple authorizations and other security protocols.

Smaller transaction fees

One another use case of how FinTech is changing the norms for traditional banking and helping customers is by eliminating transaction fees. Now users are already turning towards FinTech apps in order to make transactions as they don't charge large transaction fees as compared to the traditional banks, which will ultimately charge huge bucks for the same.

Convenient user experience

Now FinTech solutions made available across various countries allow users multiple opportunities to choose the product or service they are looking for, all with the help of AI and ML. Customers no longer require face-to-face consultation with a certain bank employee when they have to choose a mortgage plan. All they need to do is answer some important questions on the app and get access to the most suitable solutions for their problems within just a few minutes. The facial recognition feature of the smartphone further ensures identification and helps in the verification process.

Blockchain technologies

Blockchain technology embedded in the FinTech apps allows the users to make instant secure transactions and handle their financial assets more efficiently, without having to pay any third-party an entire fee just for the same. Banks have ultimately started using blockchain technology in their apps and offer their customers the ability to transfer financial values any time of the day. 

Conclusion

We hope this blog has helped you comprehend the various use cases of FinTech in the banking sector and how it is changing the face of traditional banking for the best. Implementing FinTech for your banking business can not only help you gain traction in the market but also witness maximum ROI. Stay tuned for more information on the subject coming your way!