Fintech, a term used for all kinds of technological advancements that provide financial services is disrupting the financial and banking sector as their banking products and services are based on technology-enabled innovation. With the advent of Fintech banks, it is expected to transform the shape of the traditional institutions. Although it's a much-hyped innovation, it is surrounded by several misconceptions among the consumers, and therefore these myths are required to be debunked.
1. Fintechs are similar
Fintechs reside under the broad umbrella of the financial service provider, but if one digs deeper, one will notice that the industry is growing like never before with the emergence of all types and sizes ranging from wealth management, money transfer, lending and many more. Hence the industry should focus more on creating awareness regarding the different facets of the fintech industry to help consumers select the particular segment of the fintech as per their requirement.
2. Fintechs aren't secure
Online security is an essential aspect of this continually evolving digital era, and since Fintech is a part of the same, it is not considered safe enough. However, with the introduction of cloud technology, Fintechs have become more secure and reliable. The new cloud-based technology has better encryption, fraud detection, and security standards. Everything is digital now, from shopping for groceries to medicines, our daily purchases have gone a long way. Similarly, financial services can also be translated to one such broad medium while providing tight security.
3. As online items are cheap, Fintech must be cheaper too
A huge misconception that surrounds this technology is that Fintech is cheap. Not all the services provided by fintechs are affordable. Moreover, on occasion, one could discover fintech's offerings at a higher cost than the traditional sectors. Hence, fintech companies are transparent about the fees structure and offerings. Therefore, consumers should be aware of their need and must research thoroughly before approaching any company.
4. Fintech industry means the end of banking
Fintech industry has not put an end to banking; it has instead transformed the way we bank. Moreover, after seeing the benefits of the fintech industry, more banks are willing to transform to fintechs. Therefore, fintechs have to find ways to match the stability, reliability, and authenticity of banks, which means finding good funding sources and diverse customer base.
One can gather a lot of knowledge of the fintech world if they avoid common myths like these. The best thing for a customer is to educate themselves regarding the broad features this industry provides and opt for the one that is appropriate and beneficial.