Fintech Revenue vs. Financial Industry: An Academic Study

Disruptive Nature of Fintech

Fintechs have revolutionized the financial services industry. With the introduction of these new technologies, the traditional barriers to entry have been broken down as individuals and organizations gain access to an unprecedented variety of financial services. Through the rise of fintech, it is now possible to access a wide array of financial products and services that were previously difficult or expensive to obtain. This disruptive nature of fintech has enabled the development of new markets, particularly in areas such as asset management, algorithmic trading, credit underwriting, and insurance.

The growth of fintech has been nothing short of revolutionary. Global fintech revenues in 2018 were approximately €92 billion, with the market continuing to expand at an impressive rate. New models of financial services are being developed and adopted, leading to greater competition and efficiency in the industry. This increased competition has allowed for a much larger variety of financial services to be provided.

Forex Trading in a Fintech World

The introduction of fintech has drastically changed the way that forex trading is conducted. As the traditional barriers to entry have been broken down, it is now possible for individual traders to access the foreign exchange markets regardless of their size or financial background. The scope of products available to individual investors has grown substantially, allowing them to diversify their portfolios and take advantage of the price fluctuations of different currencies.

Algorithmic trading has been particularly powerful in forex, as it is relatively straightforward to develop trading bots that can execute transactions on the investor’s behalf. Automated trading systems such as these can facilitate trades on a much larger scale than manual trading, allowing for greater profitability and diversification. In addition, the increased efficiency of algorithmic trading has been beneficial for less experienced traders as it can reduce the time and energy needed to monitor the markets.

Leveraging Fintech for Maximum Forex Returns

While fintech can reduce the workload for traders, it cannot replace the need for careful market analysis and the development of effective trading strategies. Effective forex traders still need to keep up-to-date with the latest market developments and trends in order to make the most of their investments. However, fintech can be used to supplement manual trading and help uncover new investing opportunities.

Tools such as AI-driven algorithmic trading systems and robo-advisors can be used to identify promising forex trends and open up new avenues for investment. Similarly, automated order execution systems can allow for larger numbers of trades to be conducted in a shorter period of time, making it easier to take advantage of fleeting market conditions. By leveraging the power of fintech, traders can maximize their returns in the ever-changing world of forex trading.

Fintech Disrupting Traditional Financial Services

A 2015 Goldman Sachs study calculated that fintech may eventually disrupt up to US$4.7 trillion of the total revenue currently held by traditional financial services. Fintech is the popular term used to describe financial technology, and it is creating new business models, revolutionizing delivery within the financial sector, and transforming market dynamics. There is no doubt that the impact is ground-breaking, and it is changing the way that individuals and businesses interact financially in incredible ways.

Fintech Revenues on the Rise

From 2017, the fintech industry shown incredible growth, with increased global investments and radically changing strategies for banks and other traditional financial institutions. Analysts predict that fintech revenue will grow to $3.5 trillion – $4.5 trillion by 2022. This dramatic increase in the fintech industry poses great potential to change the highly entangled banking sector. These changes have the potential to be disruptive forces that could lead to even more increase of fintech investments.

Regulatory Implications of Digital Transformation

Due to the advancements of Fintech, regulatory authorities have also had to adjust with market outcomes and facilitate digital transformations. Taking the US for an example, many new regulations and guidelines have been released and updated over the last few years in order to protect consumers and businesses from the growing power of the fintech industry. In Europe, regulations like GDPR and MIFID have been implemented to address data privacy and to overhaul financial markets.

Despite the regulations, it is clear the fintech industry is here to stay, and its revolutionary impact on the traditional banking sector will continue to provide new opportunities for individuals and businesses to streamline their finances. It is clear that, as the untangling of the banking sector continues, fintech will remain an important factor in this transformation.