No matter what economic industry you are in, your business should have a financial system in place. This simple fact makes the banking and finance sector one of the biggest in the world, with many business opportunities.
As the digital revolution swept across various industries, the finance sector was not spared. While most of the industry has remained unchanged for hundreds of years, even with technology, only tiny upgrades were made to the processes that were decades old.
However, more recent technological advances are creating new opportunities for businesses to improve and change the way the financial industry manages its activities. The idea is to use technology to improve customers’ access to financial services.
These customers do not always have to be the end users only. Other parties that gain from growing financial technology (fintech) include banks in business-to-business (B2B), SMEs in business-to-consumer (B2C) and other business clients.
Okay, what exactly is fintech?
Fintech includes a wide range of innovations, and business and consumer solutions in the financial sector. The scope is extensive, from retail banking to financial literacy and education, from investment to the creation of digital transactions and currencies like the blockchain and bitcoin.
In addition, fintech takes the shape of flexible, always connected and mobile financial solutions that consumers want to use compared with fixed slower systems in the past. These days, consumers expect that their transactions should be able to happen anywhere they are and at any time while needing to pay minimal transaction costs.
You will recognise the growth of fintech in the increasing shift to electronic payments, cashless transactions and even QR code-based sales. In 2016, the government, through Bank Negara Malaysia (BNM), created the Financial Technology Regulatory Sandbox Framework to encourage SME participation in fintech.
What the framework does is allow fintech companies and SMEs, as well as financial institutions in Malaysia, to experiment with fintech solutions in a controlled environment for 12 months. After testing, BNM will decide whether to allow the solution to be introduced to the general market audience.
Is there anything left to do?
While it seems like all the opportunities in fintech may have already been explored, there are still many areas and opportunities that are untapped. For instance, moving forward, new technologies like artificial intelligence (AI), machine learning and big data analytics are expected to drive more innovation and change in the sector.
In addition, while EY’s FinTech Adoption Index 2017 indicates that one-third of consumers already use at least two fintech services daily, as more people get access to the Internet, the number of fintech users will increase.
Source: EY FinTech Adoption Index 2017
This is where the opportunities are in; connecting increasingly aware consumers to financial services as easily as possible. If you are not sure what area of fintech you can start a business in, here are a few of the leading ones:
1. Cryptocurrency and digital money
Popular examples include bitcoin, which allows users to make payments online but has increasingly become an investment option.
2. Blockchain technology
This is the backbone of many cryptocurrencies. The technology improves the speed and safety of transactions while reducing costs.
Uses technology to help improve the way the insurance industry works.
There are millions of disadvantaged/low-income people without access to financial institutions. They can be an entirely new market.
There are always individuals trying to hijack digital financial systems for their own gains. This billion-dollar opportunity is to make sure that they cannot get in.
Using new technologies like AI and machine learning, you can provide consumers with cheaper, accessible, and automated investment and financial advice.
Activate your membership to access a wealth of exclusive content, deals and events. Registration is FREE and easy!
SIGN UP NOW