In the last decade, the banking landscape has become more fragmented and competitive and is continuing to evolve at a rapid pace thanks to technological advances and regulatory changes. The digitization of financial services has resulted in some banks being left behind – in part due to legacy infrastructure, and also in part due to incumbents being slow to react once the industry was no longer monopolized.

Fintech is the innovation that seems to break down the barrier of the future in the finance field. Many call Fintech the Fourth Industrial Revolution, which emerged from the modern entrepreneur’s desire to adapt to his new needs. Experts describe it as the missing link between financial traditionalism, and the finances of the future. But what exactly is Fintech and how can we expect it to change the future of banking as we know it?

Fintech Defined

FinTech (financial technology) is anywhere technology is applied in financial services, or used to help companies manage the financial aspects of their business. This includes new software, applications, processes, and business models.

FinTech is not new. It’s been around in one form or another virtually as long as financial services have. After the global financial crisis of 2008, however, FinTech has evolved to disrupt and reshape commerce, payments, investment, asset management, insurance, clearance, settlement of securities and even money itself with cryptocurrencies such as Bitcoin.

How Fintech is Changing BankingFintech

Financial Technology has greatly disrupted the way that banks and financial institutions operate today.  The rapid rise of FinTech in recent years has changed the business landscape in banking, with consumers and businesses now asking for more innovative solutions. Business owners are now investing in the Fintech industry. This has led to an increase in the efficiency of various companies, including banks and insurance companies. In the past five years alone, investment in private FinTech companies has jumped from $1.8bn in 2010 to 19bn in 2015. The ‘new kids on the block’ are presenting younger consumers with new and innovative ways of banking.

Read also: FinTech App Development Cost Including Advanced Features

These recent tendencies require the banks to increase investment in FinTech, increase further standardization of back-office functions and rethink their service distribution channels, especially the business-to-consumers models. Some members of the financial services industry see the boom in FinTech as a threat to the traditional banking industry. Others believe that FinTech has become a challenge that can be turned into an opportunity, as it provides more flexibility, better functionality in some areas, and the aggregation of services. Banks and the finance field as a whole, have been relatively quick to adopt new technologies and upgrade the services that they provide to their clients.

How Fintech is Changing Banking.Thanks to technology, people everywhere are used to superior provider interactions. They want everything to be fast, streamlined, convenient, accessible and diverse. By comparison, traditional financial services are obsolete and limiting, which is why Fintech introduced innovations such as:

  • The use of cryptocurrency such as Bitcoin
  • Intelligent buyer-seller contracts executed via blockchain
  • Open banking
  • The implementation of AI in apps that helps customers understand their financial behavior and provides them with financial advice
  • Robo-advisors which provide reliable investment advice at a fraction of the cost
  • Cybersecurity innovations that protect customers’ data and funds
  • Solutions for unbanked individuals or companies who cannot obtain financial aid from banks


Read also: How Open Banking and Bank APIs Are Boosting Fintech Growth


How will Fintech Change Traditional Banking?

The evolution of Fintech had a major impact on traditional banks. Faced with a huge competitor, banks were forced to adapt and keep up. Fintech will reduce jobs in the banking sector by at least 30%, as users are switching from traditional banks to Fintech services. But, as a whole, banks remain trusted institutions, and Fintech will also create new jobs. Many banks have responded to the challenge by developing their own services (apps that allow users to send money instantly to clients from the same bank, online loan calculators etc.), and some are even investing and collaborating with Fintech companies.

FinTech offers 24/7 access to bank customers and offer services that are available via the latest digital channels such as social media. It is estimated that by 2020, social media will become the primary medium to connect, engage, inform and understand customers. It is also expected to be the channel where customers would research and compare banks’ offerings.

5 FinTechs Changing the Global Financial Landscape


AimBrain is a mobile biometrics platform. This firm wants to do away with passwords by tracing the way the user swipes and taps their smartphone screen to identify them.


Founded in 2011, the bitcoin wallet now has 6 million users and $30.5m (£21.7m) in investment. 


The German smartphone-first mobile bank has drawn 80,000 users within its first year of launch. Number 26 is going against the grain by forming strategic partnerships with other FinTechs, much to its success.

Property Partner

Property Partner is a platform that allows users to invest in individual properties across Europe, with as much or as little money as they want. As of March 2016, the business had crowdfunded over 170 properties, with more than £25m invested in just over 12 months.


Revolut’s vision is to make travel money a thing of the past. The company’s card can be used anywhere in the world where Mastercard is accepted. The accompanying app boasts a range of useful features, including an option to block the Revolut card directly from the app in case of theft.

Ewallet How Fintech is Changing BankingConclusion

FinTech advances have become more and more widespread, and it is estimated that 3 out of 10 clients (personal or commercial) use it, knowingly or unknowingly. FinTech’s have continued to shape and build the future of the financial services industries. It’s now a mandate for institutions to plan and invest in emerging technologies that are going to be beneficial for both the sector and for the end-users.

FinTech has changed the finance industry for the better. FinTech has brought a lot of new players to the industry, but we believe that the companies that fulfill the biggest needs of customers digitally are the ones that succeed.

Read also: Fintech App Development 7 Insights That Will Delight Your Users

[Total: 2    Average: 5/5]