Venture capitalists usually get the credit for the fintech boom. Investors, as featured in this informative infographic from our friends at Fortunly, have been generously swelling the coffers of upstart tech companies with billions of dollars since 2012.
Despite concerning profitability issues, many fintechs have enjoyed the freedom of pushing the envelope of innovation. Some of them have even grown impressively to achieve unicorn status without proving how to break even yet.
While fintechs would have not reached this far without unconditional venture capital investment, the real driving force behind their rise was growing smartphone usage.
The proliferation of mobile devices rendered the financial services industry ripe for disruption. Surprisingly, incumbent banks failed short in delivering the quality of service consumers expect in the digital age. Perhaps traditional financial institutions understood the opportunities that come with mobile apps, but they somewhat lack the imagination and will to capitalize on them.
With overflowing capital, fintechs took advantage of the explosion of smartphone usage to usher in an era of mobile banking.
Tech companies conceptualized clever business models, used alternative data to maximum effect, and compelled countless unbanked adults to own an account with a mobile money provider or even with an actual bank.
Thanks to innovative technologies, fintechs were able to provide financial services exclusively online to overcome geographical constraints and eliminate the hassles of physical branches.
Digital wallets made peer-to-peer and consumer-to-merchant payments the norm. Suddenly, nobody has to bring cash anymore to send money to someone or shop at brick-and-mortar stores.
The mass adoption of mobile devices gave birth to neo banks. App-only financial institutions utilized AI, biometrics, and other cutting-edge technologies to deliver superior services and improve user experience in order to gain the trust of customers even if they have nothing but Internet presence.
The number of fintech users will only increase as consumers across the world continue to become digitally savvy. To learn more about the global adoption of fintech, check out the infographic below!