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What is FinTech?

Written by Nina Mohanty, Digital Leaders FinTech Contributor

A few weeks ago, a friend of mine told me I was “doing the FinTech” so well. Besides the fact that it made me chuckle and I appreciated it greatly, it made me realise that outside of my bubble of FinTech friends, not many people know what FinTech is exactly. To be honest, even working in industry I’ve had to re-evaluate what I consider to be FinTech.

Around the same time as aforementioned conversation, several large banks celebrated the anniversary of the ATM (automated teller machine). Believe it or not, the humble ATM, the provider of cash for all our cornershop stops and unforeseen cab rides counts as financial technology despite its 50th birthday this year.

Financial technology, for those normal people who do not devour FinTech news or podcasts, is applying technology to improve financial services. FinTech today has come to encompass everything from challenger banks to automated savings plans to chatbots who regulate your spending and saving.

The FinTech industry has grown massively over the years. According to a report by KPMG, FinTech funding reached $2.3 billion over a span of 178 deals by Q3 of 2016. This is a phenomenal amount of money and there is a reason for it.

Who likes to talk money? Is there anyone who enjoys doing their taxes? Do you know anyone who genuinely finds joy in saving or investing money? In getting a loan or a mortgage? Maybe you know a few people, but chances are you’ll be hard-pressed to find someone who actively finds pleasure in dealing with his or her own money. The goal of FinTech companies the world over is to simplify money—to use technology to make it less complicated, more accessible, and ultimately less of a headache.

A lot of times, people who work in industry find their opinions bouncing around the echo chamber that is the FinTech community. We talk PSD2 and GDPR. We love acronyms. We shoot the breeze discussing KYC (Know Your Customer) regulation and APIs (Application Programme Interfaces) and how obviously they are important and can either be improved or bring about improvements. We think our customers are in lockstep with us and know exactly what we’re on about. In reality, few actually do.

At the end of the day, what is most important is the person who is going to use these plethora of apps. FinTech, much like most other digital innovation, is about making our lives easier. It’s about convenience, user experience, and customer-centricity. So often we forget that and lose the plot from where we’re sitting.

The true leaders in the FinTech community are those that remember that end of the day, the work they do each day is not for themselves. The work is about improving the lives of others. Digital transformation for incumbent financial services firms and banks will take time undoubtedly, but the secret sauce FinTech companies have been using is not really a secret. The secret sauce is remembering the end-user. The best digital transformations are the ones that put the customer first and that is what FinTech is all about. So now it’s back to the drawing board for all of us, whether we’re big banks or a fledgling startup. It’s time for us to re-map our product and service plans and put our customers at the heart.

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