• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
WittySparks Logo White

WittySparks

Ignite Your Thoughts

  • Topics
  • Reviews
  • Newsletter
WittySparks / Finance / Fintech Opportunities That Are Transforming The Financial World
Financial Technology - Fintech

Fintech Opportunities That Are Transforming The Financial World

Finance Updated: January 31, 2022 by Nishitha

From sending money to a friend using PayPal to making passive investments with a Robo-advisor, even the most tech-shy person has probably used fintech before. As fintech continues to grow as a popular force within the financial world, it may even replace many of the day-to-day banking services you take for granted.

And it’s all thanks to disruptive startups offering online alternatives to traditional banking. But while these startups offer a convenient alternative for people like you, they provide a rare avenue for the underbanked to achieve financial agency. By serving the underbanked, fintech challenges everything we know about the financial world and has the opportunity to transform it entirely.

Who are the underbanked?

According to the FDIC (Federal Deposit Insurance Corporation)’s 2015 National Survey of Unbanked and Underbanked Households, 19.9 percent of American households were underbanked. Amounting to roughly 24.5 million people, this group represents those individuals who have a checking or savings account with a typical bank, like Wells Fargo, TD, or Bank of America. Yet despite these accounts, they weren’t able to secure additional financial products like personal loans or investments through these banks.

Why do they shy away from traditional financial services?

There are many reasons why people are underbanked. Many of the underbanked are purposefully locked out of these financial services by banks. These traditional institutions have strict criteria that prevent those with limited or bad credit from taking advantage of typical lending or investment options. Some fail to keep the minimum balance requirements of even the most basic accounts. Others face barriers that prevent them from accessing these branches, as banks are closing their local offices in low-income communities at an increasing rate.

Fintech provides three major online alternatives to the underbanked.

Though fintech varies in terms of services, each company is unified by its commitment to providing convenient, online solutions – many of which rely on automation and machine learning.

#1: Mobile banking

Mobile banking from companies like Chime provides an online platform that consumers can access 24/7. Without a physical branch that its customers have to visit, a mobile bank like Chime gives customers a way to complete common financial tasks anywhere they have Wi-Fi. They can deposit checks and complete e-transfers without relying on an ATM or brick-and-mortar location.

#2: Online direct lending

Similarly, an online direct lender like MoneyKey doesn’t have a local branch in each state. Instead, it offers an online platform that automates much of the borrowing experience. Customers don’t need to physically meet with an advisor and discuss their options. They only need to submit basic financial information over their website, and they could secure an installment loan as soon as one business day once approved. A lender like MoneyKey sends approved installment loans through direct deposits, and its customers repay these personal loans online.

#3: Automated investments

Automated investment apps like Betterment provide the digital version of the typical stockbroker or financial advisor, with fewer fees, less red tape, and less direct involvement on behalf of its consumers. Robo-advisors rely on machine learning to evolve along with the needs and expectations of their customers, offering a hands-off way to invest in a diversified portfolio of ETFs tailored to your risk tolerance. Few companies are like Betterment, which requires no minimum starting deposit, making it possible for those who have relatively small investment dollars a chance to participate.

These services make the biggest difference in underbanked’s lives by offering a way to access banking services, secure cash loans, and create investments. But these changes have a domino effect. Fintech offers innovative fast, convenient, and easy solutions for anyone tired of the traditional banking experience.

Previous Post: « Top 5 Tips For Sending Money Abroad To Relatives
Next Post: Get Your IT Business on the Map with Effective Marketing Strategies »
Profile picture for Nishitha

About Nishitha

Co-founder of WittySparks
WittySparks Staff

I am done with my Physiotherapy Graduation. And I always try to share Health and technology tips with people. Apart from Physiotherapy and being a tech savvy, I do explore more on Technology side and I keep sharing my findings with wider audience.

View all posts by Nishitha

Primary Sidebar

Featured Productivity Software

Notion logo
Notion

Whether you’re a solo entrepreneur or a large team, Notion Workspace can help you stay organized and get more done. Get started today and take your productivity to the next level.

Try Notion for FREE

Related Topics

  • Which is better – debt fund or fixed deposit?
  • Cryptocurrency Market Analysis For Innovation
  • The role of Business Intelligence in Financial Business?
  • How did Financial Services change by Digital Transformation?
  • 5 To-dos after Getting a New Credit Card
  • What is DeFi in crypto? How does it work and its future?

Exclusive Coupons

  • Moqups coupon code: WITTYSPARKS for 20% or PARTNERS50 for 50% discount.
  • WPForms coupon code: WITTYSPARKS for 50% off.
  • Serpstat coupon code: wittysparks_discount for 30% off.
  • SEO Buddy coupon code: WITTYSPARKS for 25% off.
  • Morningscore coupon code: wittysparks for 30% off for 3 months.
  • FlexClip coupon code: WITTYSPARKS for 30% off.
  • Uplead coupon code: “witty” for 30-day free trial.
  • FastestVPN coupon codes: WITTYSPARKS15 or WITTYSPARKS10 or Get up to 93% OFF.
  • Outranking.io coupon code: WITTYSPARKS50 for 50% off.

For more such offers visit our exclusive offers for SEO, Bloggers, Marketers and for Business owners.

Footer

Affiliate Disclosure

If you make a purchase from WittySparks links, we will receive a small commission. See our Affiliate Disclosure.

Sponsors

Partnered with FreePik to use the licensed images.

turn to dhgate for smartphone

Follow Us

  • Facebook
  • Twitter
  • Pinterest
  • LinkedIn
  • Instagram
  • YouTube
  • RSS

Copyright © 2023 · Hosting sponsored by Rocket.net (Affiliate link)

  • About Us
  • Contact Us
  • Privacy Policy
  • LinkedIn
  • Twitter
  • Like
  • Pinterest