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Beginner’s guide to fintech by Avner Motaev

by Avner Motaev
12th Jul 19 6:44 am

Most of us have heard of financial technology, or ‘fintech’. But it is a vast and complex area and is still an emerging sector. So, it is no surprise that many people are still asking: what exactly is fintech?

Real estate expert Avner Motaev, based in Vienna, explains it with a beginner’s guide to fintech.

A beginner’s guide to fintech

The top line is that fintech describes the many ways that technology is now being used to transform the financial industry.

“Fintech is all about using the new technologies we’ve seen developing over the last five or ten years in a financial context,” says Avner. “Everything from cloud technology and smartphone apps to blockchain are having a huge impact on the financial industry.”

It’s also a fascinating meeting of two very different sectors. One, the traditional banking and investment industry, has been around for millennia in one form or another.

The other – the tech industry – is still relatively new. This clash of cultures is already sparking huge amounts of innovation and creativity.

“There are all sorts of different operators in fintech,” says Avner. “They could be financial institutions who are using tech solutions to solve old financial problems. Or they could be tech companies who are now applying the lessons and innovations of their own sector to the financial world.”

Avner gives us just a few examples of the kind of innovations that are coming out of the fintech industry.

Fintech is improving the user experience

“Banks are learning a huge amount from the tech industry about improving customer experience,” says Avner. “Ultimately, almost all of the innovations we’re seeing in fintech address this.

“Take the rise of mobile banking apps – one of the most familiar forms of fintech for many people. In the best examples, fintech developers have learned all of the good lessons about user experience and accessibility from the non-banking world and re-applied them in this context.

“Banks and financial institutions are using this UX design and functionality know-how to build loyalty and even cross-sell their products and services, directly through someone’s smartphone or tablet.”

But there are also less tangible fintech innovations that are arguably having an even bigger impact on the world of finance.

Reshaping the world of finance

Blockchain is a great example of a piece of financial technology with the ability to transform many different areas of our business.

“I think that blockchain, as an open-source distributed database using the very latest cryptography, truly is a game changer,” says Avner. “We’re seeing already how it is used to underpin crypto currencies like Bitcoin and Ethereum.

“The secure and shared nature of blockchain allows us to create currencies that no longer rely on a central bank, brokers or intermediaries.

“This increases speed and efficiency across the whole financial system, reduces admin costs and potentially eliminates fees. Transactions are now peer-to-peer – and that represents a fundamental shift in power from institutions to individuals.”

The practical impact of fintech

But while fintech like this might be exciting to the software developers behind it, why does Avner Motaev believe it is relevant to the financial industry, its customers and investors?

“For the financial industry, fintech offers a powerful way to collect vast amounts of data on its users,” says Avner. “And in business, this kind of data is everything.

“Being able to analyse and predict customer behaviour is invaluable when it comes to developing new products and services.

“Meanwhile, also being able to highly personalise the experience that people have when they interact with their financial provider will give them the competitive edge in a tough market.”

“For customers, it means a better experience. You might be investing in an Initial Coin Offering. You might be paying back a friend quickly and easily using a banking app. Or you might be checking on the performance of your stocks using a trading app. Whatever it is, fintech is the enabler.”

Finally, what does Avner see as the defining challenge for the fintech industry in the coming years?

“Trust has to be the number one concern of any business, regardless of how user-friendly their tech is,” says Avner. “Your customers need to know that your financial technology works when they need it to. They need to know that their money is secure.

“The challenge for fintech is that trust takes a lot of time to build up. But it can be lost very quickly.”

Avner Motaev manages several companies in the real estate and telecommunications industries. He is the founder and CEO of mobile2business and lives and works in Vienna.

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