Emmanuel Addy CEO, and co-founder of The Money Cloud (TMC) discusses how TMC helps with the process of intelligently selecting the best payment provider to suit its customer’s needs.
Digital transformation has become the talk of the town ever since businesses, around the world, have begun moving their operations online and providing a plethora of virtual services to their audiences. While this shift has occurred unanimously across various industries, it’s most noticeable in the banking and personal finance sectors. This has led to the popularisation of the term – fintech or financial technology; a marriage between financial services and information technology. While the term has just begun to feel generalised, its origin can actually be traced back to the early 1900s. Everything, from the advent of credit cards in the 1950s and NASDAQ in the 1970s to Bitcoin in 2008, falls under the umbrella of fintech.
One sector of finance that has been greatly impacted by the evolution of fintech are international payments. The main purpose of said evolutions was to increase the user’s convenience and, over the last 5 years, that purpose has transformed from convenience to personalisation, which has led to a large increase in the number of small companies and individuals using FX tools to grow their wealth. Some of the major benefits of digital transformation are:
- Secure payments – Developments such as polished payment tracking software and sophisticated authentication systems have provided an extra layer of security when transferring payments from one account to another. The introduction of blockchain technology into the global financial ecosystem has enabled the use of decentralised ledgers, which protects the personal information of the users as well.
- Rapid and seamless transactions – The introduction of IoT, coupled with the transaction speed of blockchain-enabled payment systems, has allowed SMEs and individuals to experience quicker payment settlements than traditional banking methods
- Improved analytics and reduced risk – The addition of machine learning and AI-based trading models automates the risk analysis of trading algorithms, drastically reducing the effect of human error and reducing overall trading risk. This also allows small investors and traders to play with higher trading volumes with lower risk as they can use technology to track their investments better, receive timely updates, and even personalised tips to tweak their strategies as they go along
- Increased accessibility – With each technological advancement in finance, especially in the smartphone era, the ability to conduct transactions beyond traditional banking expands drastically. We are living in a world where more people, especially in the African and Asia-Pacific regions, have a smartphone than a bank account. This has also incentivised banks to move toward digitising traditional banking services. Not to mention that fin-tech startups, globally, are making forex management and big banking tools accessible to individuals, thus bridging the resource gap between the general public and financial institutions
- Enhanced customer experience – Fintech startups are focusing on providing increasingly personalised services to their customers, creating a wholesome banking experience for the user. Services like customised trading tips, AI-backed spending insights, finding the right payment provider, peer-to-peer transactions, and a revamped customer experience addressing individual problems at a quicker rate are setting the tone for the future of personal banking. By deploying a customer-first approach in finance, companies are focusing on the individual investor’s needs, forcing big banks to follow suit
The nucleus of the strategy used by fintech startups around the world is to give back control of their personal finances to the people. Decreasing our dependence on the established banks to handle our transactions and trading portfolios seems to be the need of the hour. High third-party costs and services charges are just some of the reasons that have nudged users away from traditional banks and towards a more modern system with greater access to information, transparency, and growth. We are also seeing partnerships between small finance banks and startups increase as banking institutions begin to realise the benefits of targeted customer engagement, especially in underserved markets.
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