I have been asked many times “Why Fintech now?” probably due to the fact that I came from banking industry and Fintech startup as well. My high level answer to this is very clear in two points though many say due to regulation change or just obsolete industry in terms of innovation;
1. Power Shift in Supply Chain
It has a lot to do with the higher penetration of smartphones, which almost work as mobile-pc in the pocket drastically lowering the asymmetry of information for end users. Because of this shift, especially consumers now get “choices” for whatever they are about to do. To me it is the next shape of “show-rooming” emerged due to the cost effective e-commerce site, (this is basically for PC users) and now it is literally happening similar things on the road. This brings the situation where users have incredibly lower switching cost as a result.
Thus, the power shift in supply chain has been changing from manufacturer and giant retailer to consumer. Fintech players are, often cases, keen on meeting demands of certain target segment with specifically designed UI/UX, what is called in the industry “unbundling of banking”. It now all comes back to the previously written post, industry needed this structure that the role as a retailer in financial market to attract end users.
2. High Familiarity with Technology
Bank, its history goes back as old as thousand years, is the industry with high compatibility with data and technology. It always had to deal with massive calculation and prediction, which led the industry adopting latest technologies. The concept of currency wire transfer and future trading spread to other industry as a matter of fact. Just because technology existed in each sector of industry, once the move for integrating them take place due to demands from end users, the scale and speed can be phenomenal.