Fintech has accelerated disruptive innovation in the financial sector: payment, insurance, deposit and loan, capital financing and investment management.
The main innovation of fintech is to make it easier and more efficient for consumers to pay with mobile devices and the Internet, and to enable cashless transactions.
(1) Mobile payment, such as e-wallets and merchant mobile payment platforms
(2) Integrated billing, such as the integration of mobile purchasing and payment applications
(3) Simplified payment, such as machine-to-machine payment model
(4) Bio-biometrics and location-based identification
The main changes relate to innovations in behavior and transaction habits between front-end consumers and merchants. The real innovation is the development of a new payment method. The current global transfer method still goes through a centralized clearing mechanism, but there are still obstacles when transferring money from one country to another. Going forward, decentralized currency and mobile money will create competitive pressures on existing financial institutions that adopt traditional exchange models.
Insurance is the slowest innovation in the financial sector. However, in recent years, the centralized online information platform will differentiate the traditional insurance sales channels from small-scale personal and commercial insurance, which mainly focused on the relationship between insurance companies and insurance companies. customers. In addition, the emergence of automated equipment (such as self-driving cars or more sensitive detection devices) has reduced the risk. In addition, remote communication technology also allows the insurance industry to more easily monitor risks and data processing of insurance subjects in real time, which also changes insurance technology, product design and the business model.
3. Deposits and loans
After the 2008 financial crisis, traditional financial intermediaries adopted strict lending controls to control credit risks. Borrowers with poor credit scores who need funds often cannot get loans from traditional banks. Some of the alternative lending mechanisms, such as peer-to-peer lending (P2P), have created innovations for traditional financial institutions. These platforms will serve customers with low credit, but can increase to gain customers with better credit scores. It also forces traditional financial institutions to create alternative deposit platforms. In addition, financial technology has also changed customer preferences for accessing financial products and service channels. Traditional banks offer diversified and concentrated products, but innovative service platforms can provide a unique and specific channel, such as P2P and automated assets. Management platforms, etc., form a competitive relationship with traditional banks, and as customers increasingly rely on technology, a platform that can deliver a convenient and digital transaction experience. will become their advantage in mastering the relationship with customers.
4. Capital financing
The traditional method of fundraising forces financial institutions to assess the business plan and credit risk of those who wish to raise funds, which is relatively unfavorable for start-ups and small and medium-sized enterprises. Alternative online fundraising platforms, such as crowdfunding platforms, will expand the capital funding channels for these new businesses or SMEs.
5. Investment management
In terms of wealth management, after the financial crisis of 2008, customers are wary of banking specialists. Therefore, the market leader, combined with technology, has taken advantage of the trend, such as automated wealth management platforms, social trading platform and even algorithmic trading, which provides risk calculation services, management low-cost, sophisticated and customer-oriented heritage. canals. On the other hand, technology companies that provide wealth management transaction outsourcing services to traditional financial institutions, such as cloud storage and building online trading platforms, have also helped financial institutions reduce the awkward procedures and costs of the transaction process.