The financial technology industry has come a long way when it comes to fund management. So far, advance amounts of information that are being collected now by these financial institutions also come with significant drawbacks. And you begin to realize that most of these drawbacks are outright fabrications and myths. These myths and urban legends can end up eroding how potential investors and customers look at the industry. These myths affect how people perceive financial products like quick loans online. This can, in turn, hurt the overall performance of the industry as more people look at the industry as being a risky investment. Here are some of the most common myths that surround technology and finance.
1. Financial technology deals exclusively with lending and payments
This statement is not true. In as much as the industry deals more in lending and payment, about 80%, the industry also covers other financial services. There is a whole spectrum of financial services that you can venture into. From insurance to investment management and other marketing provisioning services. These are but a few of the services that you can venture into in the financial technology industry.
2. Regulations will suppress financial technology
Many government regulations have been known to curb innovations of most industries. And the financial technology industry is no different. But fintech has, so far, dealt with this issue by cooperating with the government authorities. The cooperation is helping this blockchain industry win the government’s favor and assistance. This is an excellent move as it also helps the industry win more businesses.
3. The industry is not secure
False. It is true that most of the new technology industries that come up have a higher chance of falling victim to cyber-attacks. But if you do your research, you come to find that the fintech industry is no more exposed to cyber-threats or any other kind of threat compared to the other sectors and industries. Every company that is founded on technology has to deal with issues of security. And fintech is no different. That is why the industry works round the clock to ensure it captures and addresses any threats and potential problems as they arise.
4. Fintech will destroy traditional banks
The banking industry has been around for a long time. But technology is transforming the industry so fast and in such a way that it seems the traditional banks and industry may look like diminishing. But the truth to this fact is that traditional banks will never fade. Individual banks and credit unions may fade away depending on the circumstances, but traditional banks are here to stay.
5. Fintech firms cannot survive in a tightly-regulated industry
False. As with every other company, the financial technology industry comprises companies of different sizes. Some are small while others are massive. Then you also find that some fintech firms are startups while others are established entities. Some are collaborators while others are disruptors. These features easily falsify this myth. So, merely painting the whole industry with the same brush makes your judgment look shortsighted at best. So, in as much as not, all fintech companies will survive the regulations, some startups will come out victorious. Plus, it is crucial to note that not all of them are startups as mentioned above.
