TMCnet Feature
January 13, 2022

5 Factors Driving the Rise of Fintech



Fintech is a rapidly evolving industry. As the financial landscape changes in response to new technologies and regulations, so do the products and services that support this industry. While it may be hard to keep up with all of these changes, it's important for businesses in this field to stay informed on what's going on. Here are five factors driving the rise of fintech:



1.Increased Mobile Usage

One of the biggest drivers of Fintech growth is the increased use of mobile devices. In fact, a recent study by Pew Research Center found that over 77% of American adults now own a smartphone. This has led to a surge in mobile banking, as well as other mobile-based financial services. For example, there are now mobile payment options for nearly every type of transaction, from credit cards to shopping online. In fact, according to a recent report by Business Insider, people in the U.S. spent over $100 billion through their phones last year alone.

Increased usage of smartphones has led to an increased number of apps targeted towards consumers. As technology advances and more people rely on smartphones for daily activities, the need to secure an API to develop mobile apps cannot be underestimated..

2.The Rise in Digital Payments

Another factor driving the growth of fintech is the increasing popularity of digital payments. This can be seen in the rise of mobile payment options, as well as other forms of online and electronic payments. For example, a recent study found that the global value of digital payments grew from  $5058.96 billion in 2020 to $5872.89 billion in 2021.

This trend is being driven by a number of factors, including the increasing use of smartphones and other mobile devices, as well as the growing popularity of online shopping. In addition, more businesses are accepting digital payments due to the lower costs and increased security offered by these methods.

As digital payments continue to grow in popularity, fintech companies that offer innovative payment solutions will continue to thrive.

3.Focus On Underserved Areas of Banking

Banks have been focusing on certain areas of their businesses that have seen a lot of growth in the past, such as wealth and asset management. At the same time, there are other areas that have been neglected due to this focus which fintech companies are now trying to move into such as small business lending, student loans, and mortgages.

Additionally, the regulatory environment has been changing over the last few years which has led banks and other companies in financial services trying to make sense of how they can offer their customers products that meet both compliance requirements while being innovative at the same time.

4.APIs

Fintech companies also use APIs (application programming interface) to build their products and services around existing financial infrastructure which has become a new trend.

Application Programming Interface, or APIs, has been a hot topic in the fintech world. API security is now a necessity before deciding to use and finance a product. Banks are starting to open up their systems so that third-party companies can develop products and services that work with them. This has led to an increase in startups and venture capitalists getting involved in this space as they see the potential for growth.

5.Large Amount of Capital Available

Another reason why there's such a large amount of capital available for fintech companies is that venture capitalists are starting to see the potential for growth in this space. In addition, banks are also making strategic investments in these startups to try and stay ahead of the curve.

There are several factors that are driving the rise of fintech. This includes the focus on underserved areas, the changing regulatory environment, APIs, and customer experience. As a result, there is a lot of capital available for fintech companies to grow and expand their businesses.



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