![]() ![]() ![]() ![]() Global remittances in 2019 exceeded $700 billion, with over $500 billion flowing to developing nations. These can be particularly beneficial to migrant workers, whose families-often unbanked-rely on receiving money from abroad.Īccording to the World Bank, funds sent back to the home country are an important source of income for several developing countries, representing a non-negligible four percent of GDP in Mexico, for example, and up to an eye-watering 27 percent of GDP in Nepal. Low-fee digital cash transfer platformsĭigital cash transfer platforms are now widely used worldwide. Beyond these, FinTech offers services that have altered and continue to transform the financial services industry. This is allowing FinTech businesses to innovate aggressively, and perhaps take risks that their customers are not fully aware of, while restraining incumbent financial services companies, which are regulated, from competing head-on with these new entrants.įor underserved populations, FinTech’s most dramatic impact is opening up access to credit and offering digital cash transfer platforms. Regulators do not appear to have been able to keep pace with FinTech evolution.Data has become more important than collateral for these providers. Massive amounts of data available from e-commerce transactions, social media, and internet searches allow FinTech companies to determine what financial services to offer to which person, as well as how to price that product.FinTech may be uniquely suited to fill these gaps. This acts as a powerful constraint to global economic growth and social improvement. Huge, underserved populations exist around the world with little-to-no access to banking services or credit.Dramatic growth of e-commerce has brought with it the need for easy-to-use, online, secure payment services.FinTech potentially represents a major disruptive force that will necessitate a response from banks and other financial services providers, as well as from regulators. Initially arriving on the scene in the form of online-based payment services (PayPal, Alipay, Apple Pay), FinTech enterprises have begun offering access to credit, insurance, and investments. FinTech is a term coined to describe a rapidly growing industry segment that is aiming to deliver financial services more broadly, efficiently, and innovatively using powerful online technologies, enabled by “Big Data” and cloud computing. ![]()
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