Today, people find it easier to pay for goods and services using their phones and at the same time analyzing complex data at work place, all thanks to FinTech. The continuous technological advancement that is shaping the world today has sparked key advancements in every phase of our everyday life, particularly in the finance sector.
It is common knowledge that FinTech is currently one of the highly rated technology sectors with Yo! Uganda Limited among those reshaping the financial industry.
FinTech possesses a great potential to completely transfigure the financial sector. Some of the top industry progressions include payments and lending. However, there are numerous opportunities that can be realized. Below is an absolute list of four FinTech opportunities that entrepreneurs and businesses can use to their advantage.
1. Mobile Payments and Transfers
FinTech provides transparency and low cost that most of the bank transactions lack, payment processing has seen significant growth over the last years. Due to the potential growth of eCommerce and mCommerce, it is likely that there will be a massive increase in the number of people who will be making payments using their smartphones. Be it a mobile payment system (Stripe), a hardware device that can process credit card payments (Square), or alternative money transfer service (Transferwise), any product that meets the need for cheaper, faster and easier payments processing has a great potential. Moreover, the fact that giant companies like Apple, Google use mobile payments, speaks for itself.
2. Better Ways to Use Financial Data
The advance of Big Data and predictive analytics continues to revolutionize the finance industry. Many stablished financial institutions in East Africa are currently looking for the new ways to apply the data they have accumulated over the decades.
Actionable business insights, sourced with the help of the innovative technologies, is what major enterprises use to keep up with the challenges industry disruptors are setting. Thus, their interest in advanced analytics and big data finance startups (Context Relevant, Kensho Technologies, Dataminr, and Antuit) is easy to explain. This also means great chances for successful acquisition for a number of other B2B FinTech projects.
3. Personal Finance and Banking
With the rise of FinTech, you don’t need a degree in business or finance to do your accounts. There are lots of great tools on the market, offering online banking, automatic budgeting, financial planning, and asset management services. Some financial institutions are undisputed leaders in personal finance where they allow their users to keep track of bank accounts, credit cards, investment, loans, and transactions, all within a single app. However, there is still substantial opportunity for better, smarter personal finance and banking.
4. Simplified Investing with AI Advisors
Similar to banks, markets and exchanges are experiencing significant digitization. Another trend that emerges in this area is the “robo-advisors”. They combine smart algorithms and human touch to help the users make better investment decisions. As machine learning and AI technologies currently gain momentum, this tendency is yet to see widespread adoption. Automated and personalized service, deep data-backed insights, and smarter financial decisions are just several possibilities that these intelligent algorithms open up for FinTech.
In 2015, the FinTech investment increased by 106 percent, reaching $13.8 billion globally. The numbers sound even more impressive when compared to $2.1 billion in industry funding raised in 2011.
With more regulatory freedom, advanced technologies, and innovative business models, opportunities in FinTech still have a strong potential. While both established financial institutions and emerging startups strive to seize the moment and get their piece of the FinTech pie, the market will continue to expand in 2022 and years to come.