FinTech companies around the world have now reached the potential of substituting almost any service from the banking value chain. The legitimate question to be raised then is: if there is a startup for each service a bank provides, do we really need banks? The banking industry has been and is a massive machine providing comprehensive financial services. Any bank nowadays can serve any financial need for the eligible population. The word ‘eligible’ plays a vital role here. One of the core differences in approach to financial services between banks and FinTech lies in democratization. FinTech companies often aim to serve a noble goal of global financial inclusion and making financial services more accessible for those not fitting into the credit score-based estimation of eligibility for another loan.
Certainly, any venture also serves the goal of making a profit and FinTech is no exception here. FinTech companies don’t have the luxury of almost infinite funds that major banks have, which leads to the necessity of attracting investments. Any investment aside from the benefits of company growth and technology development brings a burden of the necessity for a financial return. So there are no illusions regarding FinTech – it is still a venture desired to be profitable.
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