In recent years, fintech has become a massive phenomenon that has transformed the world. Not just in the finance industry, but all industries worldwide, and it has also changed our expectations in the way we play and work. Even the purest joys of online shopping and food delivery would be very different without fintech.
What are some trends that we see in the industry, and what does it mean?
Increased collaboration is enabling growth
A collaborative approach is endemic to the fintech industry. It is not a ‘winner takes all situation’ — the market is huge enough to accommodate partnerships, collaborations, to innovate with customer-centric products and carve out new areas of niche services.
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In U.S., Flywire is partnering Bank of America Merrill Lynch to offer the bank’s customers a new offering of simplified cross-border payments and receipts. By adding Flywire’s offering, the bank’s higher education, and corporate clients will experience much less friction in processing cross-border transactions. In Singapore, Singapore FinTech Association (SFA) had just announced the launch of a new framework aiming to promote partnerships between fintech firms and financial institutions.
There has also been increased collaboration between fintech companies themselves as they tap on each other’s innovative solution to greater efficiency and convenience to consumers.
From the perspective of my company, TranSwap, we have teamed up with CurrencyCloud, the UK-based platform providing B2B embedded cross-border solutions. We tapped on their network to offer GBVAGlobal Borderless Virtual Account (GBVA) to our customers which allows them to hold 34 currencies, receive and payout funds to anyone.
Their solution to enabled us to add a larger breadth of services to all our customers. The marked increase in collaborations with fintech and banks is indeed exciting to see, but it is not surprising.
In a fast-paced industry where you either disrupt or be disrupted, speed and innovation are critical. Collaborating and partnering banks and fintech players allow improvement in efficiency in a cost-effective manner, and this leads to new opportunities, new areas of growth for all players.
These partnerships have resulted in robust technology architecture which lays the groundwork for building more complex solutions that offer faster and more efficient means of doing things.
In recent years, one area that has improved the most is real-time payments.
Feeding the growing demand for instant payments
Payment technology has developed tremendously in speed and technology; new payment mechanisms are created. Q.R. codes and wallets have become the new normal in paying and collecting monies. New payment schemes are established, and new digital currencies have emerged.
More importantly, united payment interfaces, such as that from National Payments Corporation of India, have helped facilitated inter-bank transactions and spurred the proliferation of instant payments.
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Other countries, like the U.K., Europe, the U.S., Australia, China, Hong Kong, and even Singapore, are moving towards 24/7 real-time processing and harmonizing the payment standards.
With the new standard set by instant payments, both businesses and individuals are looking at cross-border payments now and will want to pay and collect money globally 24/7, 365 days, and in real-time.
Remittances are on the rise
Based on data from the World Bank, global remittances to all countries reached $689 billion in 2018.
With banks being the costliest remittance channels, many fintech companies have stepped up to offer cost-effective solutions to facilitate the flow of money. They have also created partnerships to help banks settle payments.
Growth in fintech can’t be stopped
The financial services technology landscape has been changing, and the trend is quite clear; moving towards collaboration and partnership to make cross-border payments transparent & efficient.
With the way that the industry is going, fintech will undoubtedly be a vibrant part of the global financial system. Players will collaborate and innovate to create new technology solutions for the financial industry.
Contributed by Benjamin Wong, CEO of TranSwap
About the author
A powerful business driver whose entrepreneurial instincts and clarity of vision has carried multiple companies through rapid and continuous growth, Benjamin Wong is the Co-founder and CEO of TranSwap Private Limited. He oversees the day-to-day business operations, as well as the company’s strategic direction and business development.
Prior to TranSwap, Benjamin was a professional accountant before he moved into the corporate world and held senior management positions. His previous roles include Chief Financial Officer (Head of Planning and Finance) and Global Director in the shipping and pharmaceutical industry.
Under his thought leadership, coupled with extensive industry knowledge and a well-rounded business perspective, Benjamin has successfully launched start-ups and grown them into corporate businesses.
Benjamin graduated from the Imperial College of London with a Master’s in Business Administration (MBA) and a Diploma of Imperial College (DIC) in Management.