Fintech and Bitcoin Trading: Will Traditional Banks Adapt?

Fintech companies aren’t new to the world financial industry but it’s only in the last few years that this area has gained significant market penetration that has traditionally belonged to banks. In the UK, for example, fintech companies have already largely taken the lead over banks in the lending business.

The emergence of such companies, which have succeeded in bringing innovations to financial services through the development of IT solutions – reducing costs and increasing the speed of services, has become a direct threat to banks. However, the same threat can easily turn into a tailwind, depending on how the bank is positioned according to these novelties.

To Whom Does Fintech Approach?
Fintech (short for Financial Technologies) is a term used by companies developing or using new information technology to enhance financial and other services. Fintech companies are financial companies that have used the sluggishness and the imposition of stringent conditions of the banks as a space for their own development and improvement.

This is reflected in agility, speed of service, but also in a clearer focus on a target group that isn’t yet “bankable” (a term often used in financial institutions – refers to people who haven’t tied themselves to a bank and aren’t accustomed to going to a bank), such as millennials.

As with other companies relying on new technologies, here innovations are mostly driven by younger people in the IT world. However, the situation is different with fintech – it’s seeking quite a bit of experience and background from the existing financial market.

What’s the Status of Bitcoin in Fintech Technology?
The appearance of a number of fintech companies in the last couple of years, with its penetration into the market, has seriously begun to disrupt the position of traditional banks, which so far dictated all the terms and conditions of the “game”. Such a conservative attitude has helped to create a space for those who can adapt to the contemporary clients of today, in an era of new technologies, where fast service delivery is expected and customer behavior is different.

The resistance of traditional banks to Bitcoin that has roots in mistrust has been solved with fintech companies. Whatever Bitcoin trading platform clients choose, they will be able to trade through fintech. From the point of view of accepting cryptocurrencies, fintech companies have solved this problem from the very beginning. They are able to accept any of the so-called fiat currencies (government-issued currencies that aren’t backed by a commodity such as gold) but also any of the cryptocurrencies, such as Bitcoin, and trade with any of them.

Quite simply, the Bitcoinblockchain is one of the solutions for the puzzle for the fintech world as it offers extreme technical advancement. With the use of Bitcoin, consumers will be able to view indexes, data mine, and do blockchain research. By accessing analytics, insights, and commerce, customers have more advantages with this new technology than with traditional banks. Customers can also register and use API companies and custom data to grow their businesses.

What Separates Fintech Companies From the Traditional Bank?
First, fintech companies bring about significant innovations in financial services, primarily when it comes to lending. They significantly speed up their work speed by introducing the latest technologies and, thereby, significantly reduce their operating costs. However, they don’t keep these cost reductions for themselves, (nor they can – for the sake of transparency that exists), but for clients and, thus,
the client has a double advantage: through the speed of service provided and through new, significantly better conditions of use.

That this whole area is no longer for neglect is shown by official data:

  • In 2008, total investment in fintech companies was $ 1.2 billion, and just 6
    years later, that figure was $ 12 billion
  • The following year, ie. in 2015, investments increased by almost 100%,
    meaning to $ 23 billion
  • According to a survey by PwC – an audit firm based in London, done in
    2016, as many as 76% of banks think their business is being threatened by fintech
    projects

We can say right now that there’s no financial area of business where some fintech company hasn’t made an entrance. For this reason, it’s feared that this may be a harbinger of a new financial “war” in the market that’s likely to affect customers as well. On the other hand, despite all the current parameters and no matter that these companies are seriously shaken up and have awakened perhaps a dormant banking business, there should be no “war”.

Those banks that recognize this on time as a chance, rather than a threat to themselves, can greatly benefit from the flexibility and efficiency of fintech companies. Each has its advantages and association would be the most reasonable solution. A bank, as a stable institution that has proprietary data and a large number of clients, and who knows how to manage risks and manage billing, can only benefit from fintech collaboration.

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