Impatience and ambition are the driving forces of the human species and thus we try to do as much as possible in the shortest possible time, as efficiently and safely as we can. As a result, we keep on thinking how to improve the existing technologies to make the most complex tasks easier and easier for everyone.
And out of this idea, a promising and disruptive trend was born: FinTech, the next level of banking that is actually revolutionizing the financial world- and the world of most people.
What is FinTech?
When finance and technology join forces to form one single concept, they become FinTech. This fusion is used to designate the technology that delivers financial services via software, such as payments apps or online banking. This way, it offers consumers and institutions a new alternative to control and better manage their financial outcomes in a more effective and secure way.
At the beginning, FinTech was used for computer technology applied to financial institutions such as banks. However, the development of smartphones led to a change into financial technology since it now supports a great deal of financial tasks such as money transfers, paying with a smartphone, managing an investment, or raising funds for businesses, among many others.
Since the famous Covid-19 pandemic appeared, Europe has seen a 72% increase in the use of financial apps and mobile banking services, which indicates that the FinTech market is becoming more and more powerful. For instance, 19 European FinTech companies became unicorns in 2021, companies such as ClearBank, ClearScore, PrimaryBid, 10xbanking or Vivid Money, to name only a few. This indicates that the continent is leading the FinTech sector and, as a result, the EIC (European Innovation Council) is increasingly funding FinTech applications.
FinTech and the EIC
Within the recent successful FinTech applications funded by the EIC, we find companies such as Hokodo, Clarity, Billon, or Invoier, which have contributed to positively change the way we bank in one way or another.
Recently, the EIC has decided to join forces with Startup Europe to promote the growth of digital and deep startups. This way, they target those startups not-yet funded by the EIC that contribute to some fields, being FinTech among them.
The EIC is supporting FinTech to the extent that, this year, it has invited FinTech, InsurTech and Blockchain startups to present their innovative solutions to important investors in an online meeting next June 27, 2022.
Financial innovation and its social impact
Apart from the multiple advantages and benefits of FinTech, such as its increasing efficiency, speed and security, it also eases most of the traditional financial tasks in developed countries, but also gives access to financial services in countries lacking a formal financial system.
As FinTech provides access to financial services in developing countries, it brings innovation to these areas. The use of digitalized financial services leads to economic growth and poverty reduction, which means that countries with a strong financial system using FinTech can achieve a higher economic growth, while developing countries can access basic financial services to help increase their incomes and, as such, promote innovation.
FinTech also contributes to the creation of employment and to the development of new fields, and thus its advances can be applied in many other fields. For instance, FinTech could be applied in healthcare since it could connect doctors with patients who have no access to healthcare centers, or it could also help us control air pollution, risks, environmental threats, etc., so as to make the Earth a more sustainable planet.
As we mentioned at the beginning, ambition moves the world, so if FinTech has proven to be valid in terms of finance, who would not dare to expand it to other fields?