In today’s fast-paced world, fintech’s role in society is becoming increasingly important, particularly in light of the global impact of Covid-19. We’ve all interacted with fintech, whether it’s through online payment systems like PayPal and Square or innovative forex broker apps like Robinhood and Acorns. In this article, we’ll delve into the five key reasons […]
In today’s fast-paced world, fintech’s role in society is becoming increasingly important, particularly in light of the global impact of Covid-19. We’ve all interacted with fintech, whether it’s through online payment systems like PayPal and Square or innovative forex broker apps like Robinhood and Acorns. In this article, we’ll delve into the five key reasons why fintech has emerged as a critical player in our financial landscape.
Fintech Is Important Because –
1. Fintech Creates Financial Inclusion
Fintech has transformed the financial landscape by making financial services accessible to everyone, regardless of their location or financial background. This inclusivity is especially evident in places like Africa, where fintech companies like M-Pesa and Tala have revolutionized the way people manage their money. Through services such as mobile money and e-wallets, fintech is lifting people out of poverty and fostering financial inclusion. Notably, M-Pesa has already helped approximately 194,000 Kenyan households, which equates to 2% of households, escape the clutches of poverty.
2. Fintech is a More Cost-Effective Option
One of the most striking advantages of fintech is its cost-effectiveness. Fintech companies can provide the same financial solutions as traditional institutions but at a significantly lower cost. By automating various processes and eliminating the need for physical branches, fintech companies can substantially reduce their operating expenses. This cost-saving approach translates into benefits for consumers, such as fee-free bank accounts and commission-free stock trading apps. In essence, fintech puts more money back in your pocket.
3. Fintech is Safe and Secure
Contrary to popular belief, fintech services are highly reliable when it comes to security. In many cases, traditional banks and financial institutions can be more susceptible to security breaches due to their slower adoption of the latest technology and cybersecurity measures. Fintech companies prioritize security, ensuring that every transaction on their platform is protected, including customer data and personal information. They have also introduced innovative features, such as instant spending notifications and location-based security, to enhance user protection. Fintech companies are at the forefront of keeping your information secure.
4. Fintech Empowers Small Businesses
In the past, large businesses had the upper hand when it came to utilizing advanced financial tools and technology. However, fintech has leveled the playing field. Now, even solopreneurs and small businesses can access the same tools and services as their larger counterparts. Whether it’s processing payments through services like Square and Stripe or efficiently managing accounting through platforms like Xero and QuickBooks, innovative fintech products empower small businesses to expand their services, operate more efficiently, and scale their operations.
5. Fintech Enhances Financial Capability
Fintech doesn’t just simplify how we manage our finances; it also plays a pivotal role in enhancing our financial capability. Forward-thinking startups like Robinhood and Chime are not only shaping the future of financial tools but also promoting financial education and literacy. By improving financial literacy, fintech enables individuals to reduce their debt, understand the importance of budgeting and saving, and grasp the significance of investing for the future.
Conclusion
The importance of fintech cannot be overstated. From fostering financial inclusion to offering cost-effective solutions, ensuring security, empowering small businesses, and enhancing financial literacy, fintech is reshaping the financial landscape in a profound way. Embracing fintech can lead to a more financially inclusive, secure, and knowledgeable world.