They are professionals. They provide funds to companies that exhibit high growth potential. They are venture capitalists. They are private equity investors. And they fund and enable small companies to expand and soar. They do this by providing a route to equity markets. These professionals are germane to the value chain that a movie has honoured them.
‘’Something Ventured’’ is a 2011 documentary, which investigated the advent of venture capitalism in the USA in the mid-20th century. The story depicts venture capitalists who have worked with entrepreneurs to start and build companies. They were parts of Apple, Intel, Genentech, Cisco, Atari, Tandem, and other giants in the USA’s economy.
On The One Hand
Many established Fintech firms were propped by venture capitalists. These silent operators birthed the Fintech revolution. The revolution has transformed the world’s financial systems in the post-pandemic era. As such, the impact of Fintech in the finance industry strongly influences banks and financial institutions globally. Statistics showed that 1.7 billion people use Fintech to manage their finances without bank accounts.
Fintech has played a significant role in the development of start-up firms, firms that offer various banking services to customers. Fintech has made it easier for some individuals to manage finances on the go, handle different transactions, and shun bank account burdens.
On The Other Hand
Once a threat to banking, Fintech has changed the game. This came through the advent of mobile payment, investment, and insurance apps. These firms operate their financial databases differently due to fintech. Research has shown that Fintech’s popularity has grown due to demand. Bank customers want unrestricted access to their accounts. This is because some of them dread the banking hall and its associated stress.
The high demand was evident during the pandemic. It is happening in post-pandemic times, too. Will you make a transfer via an app? Or visit a bank branch? You and I prefer hassle-free financial services. Meanwhile, without the venture capitalists, some Fintech firms behind this revolution would have been impossible.
In The Long Term
Sahar Hashmi in Finestcon.com wrote that around 75 per cent of customers had globally adopted some form of online payment service. Another study from November 2021, suggests America has about 10,755 Fintech start-ups. The EMEA region has 9,323 start-ups. Asia Pacific region has 6,268 Fintech companies.
Fintech has equally brought deep-rooted changes. Aside from online and branchless banking, electronic wallets, cashless transactions, online customer care services, and the application of biometric sensors are common. Digitalguru.com shared that the global investments in Fintech ventures are a whopping $112 billion. In the year 2021, it was $51 billion. This revolution has had a huge impact on all banks and financial institutions globally.
Mckinsey said that Nigeria is home to over 250 Fintech standalone companies. Banks and mobile network operators serve solutions from these Fintech firms as product portfolios. Between 2014 and 2019, Nigeria’s bustling Fintech scene raised more than $600 million in funding. It attracted 25 per cent ($122 million) of the $491.6 million raised by African tech start-ups in 2019.
Fintech firms are solving challenges for traditional banks. Withinnigeria.com shared that traditional banks ride this wave. They are evolving daily. They are positioning themselves in the tech space. Consumer behaviour is propelling the growth of Fintech. The millennial and Gen Z generation are technology-driven. They want the ease of doing business and convenience. They want to travel light without carrying cash. These behaviours have influenced Fintech.
The Central Bank of Nigeria’s (CBN) cashless policy is a boost too. It is fighting the use of cash. This has led to an increase in mobile transfers, Quick Response (QR) codes, and USSD. Fintech is transforming the entire banking system from a branch-specific process. Fintech is now a lifestyle. If you do not have a mobile app, you are a dinosaur. The banks rely on the app to increase their profit margins. To improve their functions. To close down branches.
In The Short Term
When last did you visit the bank? An app manages my finances. It is a professional in what it does.
