Financial institutions, irrespective of their size, should consider becoming digitally mature

Last year, fintech has seen record success in terms of investment and within the first half of 2018 with a staggering US$41.7 billion raised.

Between 2014 and 2017, the global fintech investments accelerated from US$19.9 billion to US$39.4 billion with a Compound Annual Growth Rate of 18.5 per cent.

Global awareness regarding fintech has also increased. EY’s fintech adoption index indicated that 84 per cent of the customers were now saying that they are aware of the concept of fintech and the benefits it brings to the community.

This is 22 per cent up from the previous year!

Since its adoption, fintech has hugely profited financial institutions. But this year, people are interested in exploring other domains which can gain from this technology.

Also, global thought processes have shifted towards human well-being, thus, people are more accommodating towards ideas and products which are beneficial for the human race in the long run.

Financial stability and inclusion of developing states

The G-20 and the World Bank have worked since 2010 towards the financial inclusion of developing countries so that poverty levels around the world can come down.

The economic growth and poverty reduction through digital finance is attracting the stakeholders and policymakers of the world.

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Fintech has the ability to address persisting issues and make things work for individuals, businesses, and governments.

The World Bank suggests that digital finance can help in the expansion of financial services to non-financial sectors and the provision of basic services to people belonging to the developing world since 50 per cent of them already own mobile phones.

GDP levels can also be improved by providing a wide range of financial options to small, medium, and large business enterprises.

Initial Coin Offerings to generate revenue for startups

Forming its basis in the last two years, Initial Coin Offerings or commonly referred to as ICOs is a crowdfunding measure for startups to collect initial investments.

According to Metrofuser, the leading global innovator in manufacturing printer parts, it is hard to run your business without relying on the latest technology. They would definitely partner with such a fintech startup which deals with printers and their parts as this will bring innovation in their own business too.

Startups need blockchain and ICOs more than ever because only through the latest advancements, they can challenge themselves and disrupt their existing strategies.

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Despite having the maximum number of ICO projects, the United States is not in the lead when it comes to raising funds. Russia has raised maximum funds through its ICOs with Ethereum alone occupying 82.51 per cent of the market share.

With such tremendous returns on investments, the ICOs weave paths for any startup to function brightly and bring about a positive change to its surroundings.

The path for the future

Financial institutions, irrespective of their size, should consider becoming digitally mature.

It is only through ample investment in the digital financing sector that the institutions and businesses can stay at par with the advancements in fintech.

It has become more important than ever before to catch up with the marketplace and to present such solutions which focus on reducing the financial disparity in the masses.

Fintech is exploring Big Data and Cloud Banking to bring about revolutionary changes to the way we deal with finance and financial transactions.

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