Fintech Boom is Disrupting the Way Companies are Run

from readwrite

Finance is a central tenet of business and a pillar upon which any successful company stands. After all, the point of capitalism is to create organizations which not only do something useful but those which ultimately monetize their plans and bring value to shareholders.

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2 Responses to Fintech Boom is Disrupting the Way Companies are Run

  1. John Holliday March 28, 2019 at 7:06 pm #

    I strongly agree that Fintech is disrupting multiple industries. The main industry that it is disrupting is the banking industry. I personally never use cash. I have a Visa credit card and a PayPal and Venmo account so I rarely deposit and leave money in a bank account. If you don’t know already, banks make money off deposits, because they take that money and invest it in securities such as stocks, bonds, etc. If nobody is leaving money in bank accounts the banks are going to have a tough time generating income through investments (trust me, millennials don’t like leaving cash in bank accounts). However, that’s not the only reason banks are being disrupted by Fintech, the LaaS is hurting the banks as well. Lending as a Service is taking a large chunk of banks businesses and the LaaS companies get significantly better margins. Banks make money through investing excess cash, but their main source of income is from generating bonds by lending to originate mortgages or personal loans. The banks give you .05% to keep cash in their bank account then lend that out for 7%, good deal for the banks right? What happens if fintech wipes that out, which they very well can. Fintech uses algorithms that can generate an interest rate by accessing customers data and get back to them within minutes. Much better than going to a bank and talking to someone for an hour and waiting two weeks for them to get back to you. As a double major in computer information systems and finance, I can conclude that fintech’s algorithms propose a severe threat to the banking industry, especially further down the road as they grow. Fintech companies will grow at an exponentially larger rate year over year and will continue to disrupt industries such as the banking industry.

  2. Vincent andre Perez Diaz April 5, 2019 at 5:34 pm #

    Finance and technology, two words that a couple of years ago we would’ve never imagined would be so crucial to manage together for the sake of a firm. We have grown into technology, an era in which everything is operated with robots, artificial intelligence or computers. We use them in almost at every moment in our life, smartphones, laptops and even smartwatches and the finance sector is no different. Technology is used to ease our path and not work as much to get to a certain goal. Previously technology was used to help us do tasks that were impossible to us, but now is mostly a shortcut and an advantage in the business field.

    This article touches the idea that the introduction of technology in the finance field has improved the way companies develop, therefore changing competition. As we all know, competition is very important in the market given that in the United States we go by a open market, which companies enter and “fight” for consumers. Technology has improved the level of playing field between the big and small companies. Of course, big companies always have advantages given that their resources will provide them opportunities small businesses won’t be able to achieve, but, small businesses also have access to technology, in which they can use to grow themselves and maybe even create new markets. Not only the relation between finance and technology helps companies grow faster and be created faster, but also creates user friendly ways to control their own individual finances.
    Nowadays with technology, operations such as paying the rent, buying stuff online, paying for services, etc is really easy. You can just go to the internet and pay it from your own home. This type of online transaction not only benefits the customer, but it benefits the business as well. This facilitates the company’s management of payments and can grow depending on the amount of traffic the business is getting. Of course, as everything that is internet related this type of technology also has its cons. Its biggest con is security and transparency.

    This are two cons that go hand with hand with anything tech related. Cyber security is a topic really big nowadays and the customer is always thinking about the risks of paying online, putting their credit card on apple or android pay, etc. Of course customers will be worried of something happening to their information and the thing is that companies can help stop hackings and infiltrations, but they can’t control every external factor that can affect their systems. Transparency is also in the mind of customers and its mostly related to hidden fees. A lot of companies decide to hide their hidden fees in the small letter of the terms and conditions, and various customers do not like that at all.

    Technology will always have pros and cons, depending on what we are talking about. The thing is that we are in an era where technology won’t backtrack and our only solution is to adapt and try to maintain it as safe as possible.

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