‘Fintech’, a term coined to represent the technology and innovation processes and solutions that aim to compete with traditional methods in the delivery of financial services, has seen a dramatic rise in the global market. In fact, A PWC study indicates that over 82% of traditional financial companies aim to increase fintech collaboration over the next 3-5 years.
Although the term itself is something used over the last decade, this innovative technology goes way back to the late 90’s, when PayPal, who some consider the very first FinTech was launched in 1998. So why has it taken this long for it to catch on in a market like Sri Lanka?
FinTech is not something you would associate by word, but if you’ve ever paid for something online or transferred funds, you’ve already used it. The core of FinTech is about understanding customer needs for convenience and innovating technology to cater to these needs.
Unprecedented circumstances require unprecedented shifts in habits, mindsets, and how organizations do business. If there is one positive to take out of the unfortunate Covid-19 pandemic, is that it has ‘forced’ business sectors and organizations to embrace and adopt the digital transformation process. This transformation process was inevitable but has now been fast-tracked, and although it has required systems and processes being forced out of their comfort zones, it is resulting in a more streamlined, efficient process for businesses.
In a local context, Fintech is still at an early stage and has tremendous potential to grow. The local economy itself is in a volatile state and the full effects of the pandemic are yet to be seen, but financial service organizations, have upped their game over the years to compete with increased demand for digital-related financial services from customers.
Some the key technology trends within this sector include E-wallets / E-payment services, API’s, Blockchain and AI & Robotics. These are the technologies already very much in play and are likely to make an even bigger impact on how businesses operate and how consumers navigate their financial service preferences.
A few of the newer developments being adapted in more ‘digitally savvy’ markets include Alternate lending (the process of providing loans and other financial services outside of traditional methods) and InsurTech, the emergence of new technologies transforming the insurance industry, reducing costs for consumers and insurance companies, improving efficiency, and enhancing customer satisfaction. In our local market, we are beginning to see glimpses of these technologies at work.
A lack of innovation can be one of the pitfalls of Fintech. The technology needs to be innovative enough to simplify day-to-day tasks and processes. Value addition is another key factor that will likely be a differentiator between Fintechs. The payment aspect is only the foundation and as we have seen there are plenty of options for a simple service like this. Innovation and Value Addition will be the defining factors in the success of Fintech services.
Sri Lanka is still a predominantly cash driven society. Out of nearly 22 million people, less than 20% are classified as the urban population. Fintech services likely reach only this audience. This leaves a virtually untapped 80+% of the population. Fintechs must aim to bridge the digital divide by providing simplified solutions that would encourage even the masses to adapt and use these services. Currently, it is the fear of unfamiliarity that prevents the average person from attempting a simple financial transaction online.
Globally, it has been recorded that there are over 12,000 Fintech startups. Their aggression and drive must combine with the size and clout of larger financial services providers to innovate and deliver intelligent financial services.
To understand the magnitude and scope of the Fintech sector, here are some facts:
- Almost 25% of people the world over are familiar with Blockchain technology.
- Fintech’s worth is estimated to be well over 5 trillion.
- Globally, nearly 12,000 fintech startups have been set up.
- Ant Financial, currently the world’s largest Fintech boasts a net worth of over $60 billion and providing more than10,000 jobs.
- 46% of fintech companies in the world agree that AI is considered one of the most relevant technologies for investment
Bartleet Innovative Technologies has maintained a strong footing in the BFSI sector for over 40 years, providing services ranging from engineering and technical support to automation and other related services such as core banking. Over the last half a decade or so, BIT has also partnered with leading Fintech solutions providers over the globe to offer ‘best-in-class solutions to our clients to help facilitate their digital transformation process. This combined with knowledge-driven industry specialists has allowed BIT a place at the forefront of Fintech services in Sri Lanka.
Beyond FinTech, Bartleet IT has fervently provided a multitude of other B2B technology services and products include Desktop Virtualization / Thin Client solutions (NComputing), Total Networking Solutions (Ruijie Reyee) which includes everything from a switch to wireless access points and gateways, High volume printers and Mobile Printers (Dascom).