In 2015, the term Fintech was the buzzword with the birth of a multitude of statues and important technology giants who have enough capital to develop the most interesting areas of banking, their own business models that can be extended to their customers. The banking business is very simple. On the one hand, they accept deposits offering a place to store liquidity as consideration the depositors are remunerated with interests supported by deposit insurance and an established regulation.
These deposits and wholesale financing are used to lend money or acquire long-term assets with a higher interest earning interest margin. On the other hand, in other services we find the execution of payments either through cash through ATMs, cards, bank transfers or currency exchange. In the following lines, we will see how Fintech is attacking each niche of services traditionally dominated by banking and what they contribute to each of the banking services.
Fintech in financing
In reference to the central pillar of banking, that is, credit and deposits are experiencing something like a revolution, thanks to the emergence of lending platforms Peer-To-Peer Lending (P2P) or crowd lending a service that allows you to apply A loan or be able to invest without setting foot in the bank.
With this type of platform, a direct connection is created between lenders and borrowers allowing both sides of the transaction to eliminate the banking intermediary who took a margin of interest for the activity. Within this activity, we can find platforms to connect with companies or segments more determined as platforms specialized in student loans.
The platforms P2P loan simply connect to people seeking loans at lower with investors seeking above average returns compared with banks. This new way of understanding the activity of raising capital and titling funds is expanding, to areas such as invoice negotiation and real estate investment.
The main advantage of lenders is that lending generates interest income, which often tends to be larger than that which would be obtained by traditional methods such as fixed-term deposits. For their part, Borrowers can access financing as a traditional banking alternative. Likewise, we have the like the crowd lending is involved in an investment project but in this process is not done through a loan but through the capital, being a shareholder of the company in question.
Fintech in the payment industry
The payment industry is probably the one who initiated the revolution of the current Fintech. Paypal was born in 1998 and then acquired by eBay in 2002, becoming the default payment system on all international sites of online auction operators.
In recent years Paypal has been successively increasing its offer and now is the winning option with credit cards and also debit as a payment option in a growing number of places where electronic commerce. The payment market is constantly evolving with the ultimate goal of increasing consumer efficiency and convenience. Consider, for example, Apple’s con tactless payment system, the so-called Apple Pay, which allows consumers to purchase products and services by simply approaching an iPhone6.
Undoubtedly, apple is a key player in the payment industry however google follows closely with its Google Wallet and even Starbucks has adapted to apply for a through your app, adding an additional value to your Customers through awards and campaigns about the product.