Over the past three to five years, cryptocurrency has made a shockwave arrival to the financial world that no one could have predicted.
With these new coins and the technologies they bring to the scene, Fintech is beginning to undergo some rather monumental transformations that have not been matched in the industry’s entire existence.
As general users and the public welcome blockchain technology and a tonne of the underlying innovations that make cryptocurrency possible, Fintech firms have also begun making use of these.
Whether it be for the rapid transfer of currency from nation to nation, or small pocketable payment process, Fintech is on the cusp of a revolution that could change the way the financial world works forever.
In this article, we’ll take a look at how cryptocurrency is transforming Fintech and some of the innovations we can expect.
Improved Security for All Devices
When it comes to globally accessible services, there is one key demographic that’s missing out on these features — and that is those in lower-income nations and people without access to reliable internet banking solutions.
For example, through highly secure crypto asset investment platforms, such as Independent Reserve, users are able to invest in Bitcoin with Independent Reserve’s mobile app with little to no concern about transfer speeds, security or anything else.
For those in the developing world, smartphone payments are the backbone of finance, though due to lower security, these solutions aren’t the most ideal.
With crypto-based Fintech services, these populations will soon have access to mobile solutions that are effective, secure and easier to use than ever before.
Whether a customer is looking to pay bills, access their loan information, invest in insurance or transfer money, they’re able to do so with the more secure cryptocurrency-based technologies coming to Fintech.
On top of this, investment in cryptocurrency is effortless too, enabling these populations improved access to wealth generation.
Crypto in Everyday Transactions
Off the top, one of the more expected transformations Fintech firms are predicted to implement are the coins of their own.
A number of central and commercial banks are looking at the viability of their own cryptocurrencies for their execution across the globe and within their home-base nations.
With Bitcoin paving the way for these new coins, the central banks and a number of other financial institutions are looking into the development of their own crypto assets.
Even though the Bitcoin asset and a number of other coins on the market did start out as rather volatile and unstable, we’re seeing Fintech and commercial banks toying with the idea of a low-cost, high-speed and streamlined transactional crypto.
For reference, the JP Morgan group has already launched their own coin aptly named the JPM Coin which has been designed to transfer large sums of money instantly and at an exceedingly low cost — and in a more secure way than ever before.
Improving Fintech Efficiency
With a vast majority of the Fintech industry being focused upon offering transaction and wealth transfer services, it’s quite simple to see how crypto can be utilised here.
As we step into 2021 and the era of financial recovery from COVID-19, just about all financial institutions, governments and commercial businesses alike are looking for the most streamlined, effective and affordable ways to go about cross-border payments.
Fintech has thankfully leapt from slow, expensive and insecure transfers to utilising blockchain-based methods enabling high-speed, large-sum transfers near-instantly for clients and customers. A great example of this is in Ethereum 2.0.
That in mind, cryptocurrency and blockchain has essentially proven itself as being capable of becoming the backbone of global wealth transfers, and because of this, we are likely to see a more streamlined and efficient means of money transfer in the coming years.
More Affordable Credit
To end our list of the ways cryptocurrency is transforming Fintech, it’s important to recognise efficiency’s effect on the affordability of loans.
With a smoother and more streamlined process via crypto and blockchain-based tech, lenders are able to save time and money and offer more competitive loan rates for their customers.
That in mind, Fintech and the underlying customer experience with banking and lending platforms will be more accessible to those who need these services the most, and work to improve economic growth.
Both banks and P2P lenders will be in a more profit-focused lane when it comes to offering loans, which not only improves the customer experience, but also allows for increased loan portfolios and investor returns.