Unlocking Financial Inclusion: How Fintech Apps are Democratizing Financial Services

| Updated on February 23, 2024

Fintech refers to the use of technology for providing financial services. Apps of such kind allow users to access, manage, and improve their finances through their mobile devices.

Fintech applications can offer several benefits such as convenience, security, efficiency, and personalization.

Introducing financial technology has brought about major changes within the investment landscape, as well as increasing small businesses’ and individuals’ participation in the financial markets.

It is posited that the oxygen for these small startups and businesses is derived from the fact that initially, obtaining financial services from traditional banking services was a daunting task for individuals across the globe.

By leveraging the Fintech app development services one can enhance and benefit from the systematic and cost-effective solutions and services provided.

Let’s understand how Fintech will shape the financial industry in the future and how it will benefit emerging markets and businesses.

An Overview of the Fintech App

The Fintech platforms provide the leverage applications to deliver financial services and solutions. They bring convenience and flexibility to businesses by allowing individuals to access and manage their investments simply and effectively.

The growth and popularity of such apps have been remarkable recently, and certain factors attributed to their surging in the market, which will be discussed below.

They are quite popular because of their plethora of features, like payment processing, investment options, and analytical tools. So with these options, one can manage the finances seamlessly.

Drivers Influencing Fintech Growth?

Despite several companies’ investments in financial software, the stigma attached to it still holds the upper hand on its trajectory, making it complex.

But this is changing now slowly and gradually. So let us now understand the reasons why.

Advancing Technology

The digital revolution has been positively impacting the industry, as companies now get to enjoy innovative and seamless financial products and services that were previously unthinkable.

By learning and adapting data from data, the models of AI can perform any task without human intervention. It helps get the work done quicker, more efficiently, and more accurately, making it an intelligent choice for Fintech.

Did You Know?According to studies by the Cambridge Center for Alternative Finance, 90% of Fintech firms are already adopting and applying AI in some form to be better equipped, since it is crucial to have all the options open.

Consumer Preferences

The preferences of the consumer determine Fintech’s growth. In the digital era of the world, consumers prioritize convenience and accessible financial services to avoid issues.

This is exactly what Fintech applications do for them, which is one of the reasons why AI appears to have a higher rate of positive impact on Fintechs’ profitability.

The Regulatory Environment

The regulatory regulation of the Fintech applications plays an essential role in defining the growth. Governments and Regulators back them up and keep a regular check on whether the decorum is being followed.

This is done to keep transparency between the client and service providers and scope to improve.

Every business wants to grow in the financial services sector, thus compliance with appropriate regulations is essential.

The sooner the company embraces them, the easier future expansion gets.

The Competitive Landscape

Due to digitalization, it certainly is not difficult to be influenced by the competitive environment within the financial services industry when we talk about Fintech.

So as the costs of services are reaching new heights, Fintech startups are emerging to the rescue. It has been successful because of the cost efficiency as well as the support services’ availability.

A Venture Capital Investment

Venture capital firms are investment firms that mentor and fund tech startups.

They generally come from well-off investors, investment banks, and other financial institutions. But the VC doesn’t necessarily always have to be money.

It often comes as technical or managerial expertise. It is typically allocated to small companies with exceptional growth potential or those that grow quickly and appear poised to continue expanding.

Fun Fact!
Over the past ten years, the proportion of total venture capital funding going to fintech has more than doubled, from around 8% to 19% in 2021. In 2023 so far, the share has dropped to 13%.

Because of this, several small companies and start-ups have benefitted, allowing them to expand their operations, develop new products, and acquire the necessary resources.

Thus, they are the backbone of the Fintech companies.

How Does Fintech Democratize Investing?

Within recent years, Fintech has revolutionized investing, making it easier and faster as the traditional barriers were dissolved, letting people control their finances.

And here’s how Fintech does it.

Reducing Entry Barriers

With the recurring advancements happening, Fintech companies have created platforms to allow people to invest, even if it’s a few dollars, by automating the investment process.

Moreover, investing through automated platforms provides investors with access to a wide variety of investment opportunities.

Enhancing Investment Options

Unlike traditional investors, Fintech companies have created options to diversify their investment portfolios, so that investors can minimize risk while maximizing their potential returns.

Fun Fact!By 2030, Fintechs anticipate AI to expand their workforce by 19%!

Transparent Fees and Pricing

Instead of having hidden charges, Fintech provides users with the required data and tools.

This allows the investors to monitor the investments and also make informed decisions based on the performances.

Convenient and Easy Access

Fintech apps provide individuals with convenient access to all the financial possibilities and marketplaces, which saves time.

Stocks, bonds, mutual funds, and cryptocurrencies are some of the financial products that users can invest in from home.

Finally… What’s in store for Fintech apps as they Democratize Investing?

Decentralized finance technology (DeFi) continues to spread and be integrated, which shows that it may soon get widespread recognition.

The revolution has provided opportunities to several kinds of customers and will continue to do so by processing risk management and services as well.

This has helped them break down the barriers and make the process of investing much more handy than ever.