Digital transformation in the financial sector was badly needed, it was a sector that lagged behind the others, slow to adapt with heavy regulations.
Before fintech boomed, transferring money abroad was challenging. Those who wished to send money overseas had no other choice but to turn to banks. The process was expensive with undesirable exchange rates and high transfer fees charged by banks. On top of this, banks took days to process the transfers, this still happens today – though things are improving now.
A mobile first society
Breakthroughs in mobile and communication technologies are enabling fintech disruptors to enhance the way financial services are being delivered to consumers. Fintech emerged as promising option as we entered into a mobile first society. According to GSMA, at the end of 2018, 5.1 billion people around the world subscribed to mobile services, that’s 67% of the world’s population. Mobile web services are now so popular that back in March last year, Google began indexing and ranking pages on its search engine based on the mobile versions of websites rather than the desktop ones.
Mobile services are convenient. A few taps of the finger on the interface, and you’ve successfully done what you’ve needed to do. A good mobile app is a great customer relationship builder as brands can now be where consumer attention is at. In the UK, OfCom found that an average of two hours and 28 minutes are spent on a smartphone per day by users. Business never has to end and it doesn’t with most apps being used between 6 and 7 a.m. followed closely by 9 to 10 p.m – all completely outside of typical ‘office hours’.
This is why I believe mobile payments are the future. Fintech’s spotted the problem with transferring money abroad – it was slow, laborious, complicated and expensive. But this isn’t why these businesses have been so effective. What’s taken digital money providers to the next level is the mobile-first society in which we now live. Fintech solutions are digitally native – they’re born in the mobile age and so they don’t need to adapt to become accessible via a smartphone device – making these apps easy to adopt.
The new ways to transfer money
Easy adoption has opened the gate for digital cross-border transfer providers like InstaReM and others to join the scene. The new solutions are much more user-friendly and offer cost benefits that banks and other money transfer operators can’t offer. Its this approach that has helped digital players move the payments market forward.
As with all tech offerings, convenience and speed of transaction time are key factors where digital payment companies have an edge over traditional businesses. You no longer have to draw out cash, pop to the shop or bank and track down the nearest ATM. All you need is your mobile phone and an internet connection to perform a much-needed money transaction eliminating all the faff.
Performing money transfers from a smartphone is simple and secure. You can now send money from wherever and whenever you want. Users can keep track of their payments, how much their sending, where and when they’ve sent money all through application features. Mobile money transfers are helping the industry become more transparent.
In turn, this has raised customer expectations. They expect a good level of service, with speed and accessibility high on the agenda. They want their money transactions to be safe and efficient and as technology enhances from smartphones and tablets to blockchain and AI – the hard work for fintech firms has just begun.
What does the future hold?
The digital money transfer market will witness big changes going forward. Fintechs are partnering with each other and with global payments enablers such as Visa and Mastercard to strive for further financial inclusion around the globe. Other businesses will also move into the payments market sooner or later. We’re already seeing in Asia how the big tech players such as Alibaba, Tencent and Grab are moving into the remittance market. Even the traditional players like Western Union are aggressively pursuing digital strategy for money transfer business. InstaReM has closed the biggest funding round for a digital remittance company in the region and I think we’ll see more companies around the world move into this space in the coming year – including WhatsApp. Wallet-to-wallet remittances will grow in popularity making international money transfers as frictionless as possible. I am reasonably confident that mobile will be the default way of sending money across border sooner than expected. It won’t be a surprise if in the coming months you’ll be able to send money from Singapore to the UK to a friend via text message – and that money to be in their account in a matter of seconds.