How FinTech Promises To Make Banking Faster & Easier
Few people enjoy banking as one of their regular household chores, but for the 26 million credit thin Americans and the 24.5 million underbanked Americans, banking isn’t just unpleasant. It can be difficult. They’re deprived of the same access to financial services that many people take for granted, and FinTech startups are starting to take note. As the latest buzzword on the lips of Wall Street moguls and MSNBC Money pundits, FinTech represents a new wave of digital financial services on the market. Many of them seek to disrupt the status-quo set by traditional banks by offering simple, online access to financial services. As they gain ground in the financial sector, they’re set to increase financial participation for those typically locked out of a full range of financial services.
Faster access to additional services
Retail banks and other traditional financial companies have legacy systems in place that govern how they accept, process, and approve customer requests. Initially put in place to protect both customer and company, these regulations often create excessive red tape as the business grows. Many customers face a bureaucratic nightmare anytime they wish to talk about lines of credit, overdraft protection, or their investments.
The appeal of FinTech alternatives is that they don’t share traditional bank’s penchant for red tape. They offer similar products, but they’ve purposefully removed many of the complexities that delay or prevent people from getting the help they need.
Fintech’s mobile platform is part of the reason why companies like MoneyKey can offer a streamlined borrowing experience. Rather than needing to meet in-person to discuss a personal line of credit or waiting for someone at the bank to review their application, a borrower can sign into their app to apply faster than ever before. These FinTech apps rely on an automated system, so they can review applications and respond faster, too. In most cases, an approved borrower can get an online line of credit by the next business day.
As FinTech’s popularity rises, more lending apps will hit the market — making it easier for those deterred by long waiting times to get the help they need.
FinTech offers an alternative as retail branches shut down
At the start of the year, Wells Fargo — one of the U.S.’s biggest financial institutions — announced it planned to shut nearly 800 branched by 2020. This is in addition to more than 200 branches closed in 2017. This isn’t the behavior of a wayward bank dealing with internal difficulties but an example of a trend sweeping the nation.
According to the Wall Street Journal, more 1,700 branches closed in 2017 — the fastest closure rate the country has seen in decades. Many of these branches were in cities and surrounding suburbs in lower-income neighborhoods. There, several branches were consolidated into one. Banks claimed limited usage and lower foot traffic as the reason why their doors closed.
This is a problem for those living in the areas affected by branch closures. A customer may have to find their way across town to deposit a check when previously they could have walked to their nearest branch.
FinTech aims to help solve this issue by mobilizing many of the daily banking tasks people need to complete. In addition to apps offering line of credit personal loans, there are mobile banking apps that deposit checks, automate savings, and transfer funds via their convenient online platform. Without needing to be at a physical location to do these chores, people who live far away from a retail branch have the same access to financial services as anyone else — as do people who can’t reach these branches during opening hours due to inconvenient work schedules.
Banking in the modern age can be a challenge thanks to complicated rules and the bank’s shrinking presence in low-income communities across the U.S. Luckily, the solution is appropriately progressive. Innovative FinTech companies are offering these people an easier way to bank with hassle-free, mobile access to a range of financial services. Anyone hoping to save or borrow cash just needs a smartphone to do it.
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