IndexAbstractIntroductionInvestments in FintechIs it Fintech or Techfin? Who will win the race? Blockchain will revolutionThe new mainstream: digitalConclusionAbstract The evolution of the Internet has disrupted or even destroyed some of the conventional industries throughout the 1990s and into the 21st century. Just think of the recording industry that was completely wiped out by online streaming, or the street fashion shops that were taken over by online retail stores. However, it is believed that the only sector that will resist change is the financial sector, but this too has been proven wrong. It's changing faster than any other industry now. In recent days we have often come across the word "fintech". What does it mean? Fintech = Finance + Technology. It is an innovative technology that competes with traditional financial methods. The financial industry is considered a complex sector, however in the 21st century it has changed and is still changing. Fintech can evolve as a powerful tool by leveraging consumer spending habits, lifestyle and addressing customer pain points using BIG Data Analytics. For example, Fintech has the power to change the underwriting process in the banking industry by considering the customer's daily activities for loan proposal approval which will not be visible in their banking transactions. We have seen how the Amazon credit card has helped increase the credit record for people with bad credit history. This document is structured in such a way as to tell how fintech can act to enable better access to finance and the disruption it is bringing and will bring. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay Introduction “Money” is a primary factor in any industry and in our daily lives, it is natural to consider fintech as seemingly infinite. Today it has become important, starting from providing digital services for money transfer, facilitating the banking process and storing money in our digital wallets. Competition in this industry is increasing day by day. Many companies are inventing new innovative solutions by incorporating advanced technologies such as AI, Big Data, Blockchain and much more to outperform the competition and provide their customers with the best advanced solutions to their problems. It helps people make informed decisions compared to previous times. It also increased credibility through transparency. For many years, banks enjoyed government regulations for the financial sector that prevented newcomers from easily entering and starting their own businesses, but everything went topsy-turvy after the 2008 market crash. Banks created a deep hole in consumer trust and support. The mix of distrust created by banks and technological advances such as cryptography, cloud computing, artificial intelligence, blockchain etc. has created a perfect storm for Fintech companies to rise to the occasion. Demonetization has also been a major reason for the growth of fintech in India in recent times. Before demonetisation was announced, Paytm and the digital payments sector had not had much growth, but after demonetisation they saw a 3-4x growth. The p2p lending sector, which is a growth sector, has also been accelerated by fintech. Due to the high interest rates and the difficulty in obtaining bank loans, many people have started to get into p2p business. These changes have attracted not only start-ups but alsomost innovative companies in the world such as Apple, Google, Amazon etc. who have created their own mobile payment systems such as Apple Pay, Tez, Amazon Pay. Many companies have started investing more in fintech companies. Global investment in fintech increased tenfold between 2010 and 2017. The reasons for the rapid growth of fintech are rising customer expectations, abundant venture capital funding, and reduced barriers to entry and acceleration of the technological revolution. These forces are creating a landscape where customers are becoming increasingly comfortable with fintech. Globally, more than 50% of people use at least one form of non-traditional fintech. The success of Fintech does not lie in money, that is, it is not about focusing on money but in deciding who the target customers are and how to clearly define how they consider them as target customers. For example, suppose that Millennials (those born between 1981 and 1996, who are currently in their 20s and 30s) will care about different things than Gen X (those born between 1965 and 1980, who they will be between 40 and 50 years old). Millennials and Gen Z show no interest in high-end luxury cars like Ferrari or Rolls Royce. They don't even give importance to brands but give importance and examine the purpose and values ​​provided to them by these service providers. Millennials and Generation Z behave differently than Baby Boomers or Generation X when digesting and retaining information about products or services. We must remember that those who are in their twenties and grew up playing video games still continue this habit. It gives us perspective on how companies should satisfy them. For example, most grandparents and great-grandparents focused on wealth creation which resulted in a large amount of generational wealth. But at this point people are less focused on generating wealth. They simply inherit wealth. We can see the behavioral change. Fintech can provide services to these types of people by acting as an intermediary. There are many opportunities available to monetize, it just depends on how we approach the problem and address it and most importantly, how we describe our target customer. The financial sector has seen the change such that some banks now only exist in apps. Like Flipkart and other e-commerce spaces where everything happens in the virtual world, banks have also started operating in that mode. Although the attraction among customers is much less, in the future this model could dominate the market by reducing the number of brick-and-mortar banks. Fintech Investments Indian fintech has seen a high level of capital infusion into the sector compared to the past. Several macroeconomic factors, such as India's fastest growing economy, large population and growing digital penetration, etc., have fueled the investment growth in this sector. According to NASSCOM, the Indian fintech market will reach $2.4 billion in 2020. There are many new generation fintechs with cutting-edge technologies that are valued more than traditional banks. There are several global hubs for fintech being created around the world, such as London is considered a hub for open banking solutions, while China is mastering the facial recognition space and Israel is well known for cybersecurity. The number of deals taking place in India is increasing compared to China. The number of venture capital investments in China fell to 29 from 49 in the last quarter of 2018. The number of fintech deals increased 61% in early 2019. According to data from CB Insights, Venture Capitalist investedapproximately $890 million in approximately 130 fintech deals in the Asian market. Is it Fintech or Techfin? Who will win the race? More and more non-traditional companies are managing to conquer the market faster than traditional financial institutions. And now they both understand the synergies they can create by working together. At the same time, tech giants have also started offering financial services, such as Apple Pay, Google Pay, Amazon Pay, etc., and creating solutions in the techfin space. What is fintech and techfin? Do both convey the same meaning? Is there any big difference between them? There's not much difference. Based on the underlying organization it is classified as fintech or techfin. Companies that offer financial services efficiently using digital technologies are known as fintechs. For example mobile banking app for respective banks are a great example of fintech in traditional companies and in non-traditional companies we can say venom, billdesk, paypal etc., on the other hand techfin are those companies whose core business is technology but they also provide financial products as part of the Business service. The best example is Google Pay, Alipay, PhonePe etc. The collaboration will bring greater benefits to both sides of the field. The logic behind this is that most fintech startups will have an innovative mindset, be more customer oriented, etc., but what they lack is the scalability and strong brand recognition that is available with traditional companies. So it will be a win-win situation for both players collaborating. According to the World Fintech 2018 report, most fintech focuses on segments that are narrow or not served by traditional companies, but the problem for them is scaling. With the kind of legacy of traditional companies and the technological support of fintech startups they will create value for both. The main challenge is to create an ecosystem where both can benefit from each other. Jack Ma, founder of Alibaba, said: “The financial sector will have two great opportunities in the future. First, traditional businesses will move to digital such as online banking. A second internet bank will emerge that will be completely run by outsiders. In both cases, success depends on how the company uses customer data and learns from that information and delivers based on customer needs. A significant point to note here is that big tech companies already have enough customer base or we may even be bigger than traditional banks, but what they lack is the TRUST created by these banks. It is reserved only for them. Without gaining trust it becomes difficult for them. This too, in the tension over the privacy of their data, makes it extremely difficult for them to gain people's trust. So, to fill this gap, they definitely need the help of traditional banks, where traditional banks need high-end technology requirements. So, as we said before, it will be a win-win situation for both of them if they collaborate. Companies that increasingly bet on experience and make things easy will succeed in the competitive environment. This is the secret mantra for breaking up. Most fintech understood this very well. Banks have the knowledge and legacy, but fintech is challenging them on the technology front. It's time to reconsider the bank's value chain. There are few important things to support in this rapidly expanding fintech sector. Collaboration is everything or in other words the sharing economy will be integrated in its entirety: in the near future people will need the banking service, but it will not be in its current form. Slowlysharing will also start in the financial sector like Ola, Uber etc, sharing here means decentralized assets and using that information efficiently to find service providers rather than people automatically going to banks. Most of us think that financial services companies are the ones who take care of the end-to-end transaction process. But they simply act as intermediaries or take care of one part of the process. Likewise there are some fintech companies based on peer to peer transactions that lend money to people by collaborating with traditional banks. This type of business model exists in the UK, China and the USA. As mentioned above, there are many fintech companies that focus on particular specific problems in the value chain. According to the survey conducted by PwC, the result shows that 44% of people who earn less than $75,000 in a year would trust a technology company more than a traditional financial company for p2p loans and this percentage rises to 68% for the category. of people earning more than $100,000. There are n number of companies that act as facilitators. It allows people to raise funds or in other words helps people to borrow money for various purposes. Bankers are those who connect people who have money and who need it. But in the future, as we emphasize, this will not please. Apple has filed a patent for p2p money transfer via mobile devices. If it were to arrive, it would disrupt the retail lending format. The thing that people use it more than the traditional one due to the high costs related to commissions and other expenses etc., it costs a lot because traditional banks also maintain branches in less densely populated areas. In these countries, banks are looking to collaborate with domestic fintech companies to create an alternative distribution channel. M-pesa in Kenya would be the best example of this where it accepts deposits and payments via mobile phones and agents. In India too, the postal department is aiming to apply for bank license for small finance. It is because the postman knows every corner of his area. It will be easy for him to reach customers. So in the initial stage it seems that the postal department has a very good market base. For example, people who want to deposit can hand over their cash to the postman who will collect it from their home. It makes the process easier for people. ING is also experimenting with transforming the mobile phone into a POS terminal as a pilot project in some parts of the world. In this informal, tech-savvy world, the informal segment will not be a big obstacle for fintech startups as more people will move towards lower fees and easier usage, thus a sufficient market similar to Kenya will develop. Blockchain will revolutionize Two important things that have everyone in the industry, from startup founders to CXOs of established companies, talking about it. First, there is ample opportunity to make infrastructure less expensive than existing infrastructure. Secondly, blockchain offers n numerous opportunities for financial sectors, starting from smart contracts and so on. As we said at the beginning, the blockchain makes the infrastructure less expensive, because it is a decentralized ledger where the authenticity of transactions is performed by anyone in the block. This process helps reduce the middlemen that exist now. And the blockchain process is more efficient and transparent than today. This plethora of opportunities available in blockchain technology has attracted both budding businesses and established businessmen to develop their product.