The global financial crisis in 2008, which led to a full-blown international banking crisis, was considered the most serious crisis since the Great Depression. And while it was a downfall for traditional banking systems, it paved the way to the emergence and rapid success of FinTech companies.
Financial technology, also known as FinTech, is an innovative approach to traditional financial methods used by brick-and-mortar banks and financial institutions. FinTech has given rise to a range of new business models, applications, and processes.
Modern financing companies heavily rely on technology. They use it for various processes, such as processing application, screening candidates, collecting repayments, and even offering financial advice. All FinTech banks follow the same business model and that is the integration of technology-enabled innovation.
The indispensable use of technology is what sets FinTech companies from traditional banks. These companies can be categorized under banking, as well as insurance or asset management. They are also subject to relevant regulation and supervision.
Impact of FinTech to Traditional Banking
The FinTech industry is enormously growing at an annual CAGR of 22%. In the first half of 2018, investments in FinTech companies worldwide totaled $57.9 billion and is expected to reach $70 billion by 2020.
How has FinTech changed …