You may have a basic understanding of what Fintech is- but do you know how exactly it is changing the way we do business? Here's our breakdown of the most fundamental changes.

1. THE RISE & IMPORTANCE OF
FINTECH
And why it matters to
business owners
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2. The rise of Fintech has forever changed the way
companies do business. Gone are the days of a
company turning directly to its high street bank, as
per their ‘traditional’ business model.
But this is just a fraction of the change. How else
will Fintech disrupt conventional financial
sectors?
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3. Fintech is Changing the Loan Process
The biggest change has come about in the way people are lending and
borrowing money.
Recently, a number of platforms such as ‘Earnest’ and ‘SoFi’ have found a
way to squeeze these margins and offer a better deal to savers and
borrowers. They have done this adapting an online business model first
popularised by ‘Peer to Peer’.
Where a conventional ‘bank procedure’ would take as long as 2 weeks,
Peer to Peer lending makes it easier for people to borrow money- usually
approving funds in 24 hours or less.
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4. Fintech is Changing the Loan Process
Other Platforms:
FUNDING CIRCLE & ZOPLA: Exploded in popularity in the UK, doing millions of
pounds in loans and attracting huge valuations. They are pioneers of Peer to
Peer.
SOFI & EARNEST: Applying the Peer to Peer model and applying it to student
finance. Specialist lenders are also doing everything from mortgages to
invoice finding.
KABBAGE: The most innovative small business lender in the world, delivering
loans to small business lenders in 7 minutes. They do this via data connection.
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5. BLOCKCHAIN: Fintech is Changing the
Payment Process
According to ‘Business Insider’, 22 banks from around the world have formed a
coalition to develop common standards and use cases for the blockchain in banking.
BLOCKCHAIN: A software that powers and regulates cryptocurrency bitcoin. It records
ownership of bitcoins, as well as transactions.
CRYPTOCURRENCY: In simple terms, they represent money in digital form (like a ‘digital
asset’). They’re decentralised, meaning that there is not a single governing body
overseeing them and verifying transactions. The values of cryptocurrency (such as
Bitcoin etc) fluctuate quickly and widely.
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6. How Blockchain is Making Transactions
Faster for Businesses and Consumers
 To begin with, transactions are signed off by all parties involved in using the
software. This is then added to the blockchain- a long string of code that
records all activity.
 When other transactions are added in front of an exchange, the exchange
becomes permanent and cannot be changed.
 The software eliminates the need for a ‘middleman’ to verify a transaction,
making the process quicker, cheaper, and easier than the conventional
methods used by banks.
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7. CROWDFUNDING: Fintech is Changing
the Way We Invest
The most noticeable change in investment over the last few years, has
been through ‘crowdfunding’.
Crowdfunding allows ordinary people fund projects online, by either
lending them money or buying equity in the particular project.
Idea and caused based campaigns/ businesses are doing particularly well
with crowdfunding, as people like to invest in concepts they like and feel
emotionally connected with.
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8. CHALLENGER BANKS: Fintech is Changing
the High Street Bank, as We Know it
Atom Bank, Mondo and Starling- All three are prelaunch challenger banks
in the UK. Meaning: They are planning to have no branch network and will
be operating primarily through mobile phone apps.
As well as changing what banks ‘should look like’, these companies are also
disrupting the way in which they’re expected to work. Challenger banks are
planning to be more like a ‘marketplace’, where customers will be able to
use third parties such as ‘Peer to Peer’, and have the opportunity to ‘shop
around’.
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9. Everything starts with a conversation, so let’s
talk:
Safaraz Ali
Linkedin: https://uk.linkedin.com/in/safaraz
Twitter Handle: @SafarazAli
Tel: 0121 707 0550
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