The State of Returns and rise in Fintech domain have led to huge investments by institutional and individual investors. 3 Reasons that make Fintech an attractive investment avenue. 3 The State of Returns Forecast – Fintech Startup Activity Continues to Rise. 4 Fintech Trends – A Short Guide to Best Sectors For Investment.
In times of recession, investors all over the world look for safe havens, one such safe haven being the flexible yet risk-effective alternative of Fiat Currency. Fiat Currency and the products it represents are backed by a host of advantages and attract investors due to its intrinsic value and ability to meet the financial needs of changing circumstances. As an alternative to traditional financial services, Fintech, which means ‘Fiat Exchange’, enables investors to trade through an easy-to-use software platform and is best for those who have their own data science or finance backgrounds, as well as those who want to provide their personal investment portfolio with a range of financial solutions.
Fintech as a concept was born out of the need of banks to offer more effective ways of transferring money and facilitating remittances. This then led to creating a better platform to carry out such tasks, which benefited both financial software and the whole economy. Fintechs first started to emerge as the best solution to solving the problems of global remittances. With the rise in demand for services like direct banking, internet banking and mobile banking, companies like Xoom and Prudential started to take advantage of this new demand. This led to a surge in the number of companies like Xoom, Xeikon and IVC who offered the best solutions to transfer money and execute other financial transactions.
Today, fintech are being used to implement the best business models, and this is helping investors gain access to these innovative tools. Some sectors that we have listed for you are the FMCG segments. These include industries like cosmetics, food processing, beverage and pharmaceutical, chemical processing, textile and clothes dye industry. All these sectors have the potential to transform their businesses, providing the best solutions to their clients and customers.
Apart from these sectors, fintech companies also want to target sectors that use a lot of transaction cost, such as software development, telemarketing, and insurance companies. According to research conducted by McKinsey & Company, there is $4 trillion spent in US every year on finance and banking. With the rising costs of doing business, many banks and finance institutes are looking to reduce their expenses by streamlining their operations. They are trying to adopt new technology and adopt big data for their future growth and position in the industry.
The best sectors for a fintech investor are those who have to deal with financial services and have to convert these services into payments. There are many payment processing service providers (PSP) available who provide this capability. Payment providers include banks, financial institutions, card companies and online merchants. They provide services such as charge cards, e-checks, cash advance, prepaid Visa/MasterCard, money transfer, checks, ATM, etc. A platform can be built to integrate all these different transactions and services through a single interface. This would help the investors to make faster transactions and have more control over the investments.
In order to get access to such technologies, banks need to partner with a PSP that can provide the platform. These technology companies can provide the platform, the infrastructure, software development and the payment processing capabilities. In order to get set up in these financial services, it is necessary that banks choose the right company and one that are best able to integrate themselves with these institutions. They can also help the banks to develop their businesses and introduce more credit card processing facilities.
One of the most common uses of Fintech investment is in retail. It is seen that most people do not carry cash for shopping and hence the need to use credit or debit cards becomes inevitable. A solution to this problem arises in the form of e-check. It works like a traditional check but adds a payment processing feature. This transaction is instant and is very convenient for customers. It also enables banks to add another layer of security and fraud prevention, which is done through advanced identification technology.