FINTECHS MADE THE FINANCIAL WORLD MORE DYNAMIC AND ACCESSIBLE
We are in a period where fintechs are strengthening the ecosystem by collaborating with different sectors, especially banks, and the game dynamics are changing rapidly
Rapid developments in financial technology have played a major role in the transformation of the financial world in recent years. The digitalization of traditional financial services and the provision of innovative solutions in response to growing needs have enabled fintech to become an important sector on a global scale. On the other hand, fintechs have played a crucial role in making financial services accessible to a wider audience.
Thanks to mobile applications and digital platforms, people who previously had no access to banking services can now easily carry out their financial transactions on their cell phones while being integrated into the economic system through digital wallets and mobile payment systems. When fintechs first emerged, no one could have predicted the speed with which they would evolve into what they are today.
While it was thought that they would be local and serve only certain segments, today many institutions, especially banks, have become business partners of fintechs. Currently, we are in a period where fintechs are strengthening the ecosystem by collaborating with different sectors, especially banks, and the game dynamics are changing rapidly. The increase in fintech investments by banks clearly demonstrates that this approach to collaboration is widely accepted. Banks may not be agile enough due to the complexity of their internal processes, their regulatory obligations and regulations, and their broad service portfolio.
This can sometimes leave them behind in providing fast and effective solutions to customer needs. On the other hand, fintechs stand out with their ability to think not like a bank, but like a bank customer. Thus, thanks to fintechs, banks can develop solutions that improve customer experience, focus on needs, streamline processes, and even reduce costs faster.
NEW FINANCIAL INSTRUMENTS HAVE EMERGED
Regulations in recent years have also played an important role in the growth of fintechs and the expansion of their service offerings. Especially with the implementation of regulations such as open banking and service banking in our country, fintechs have increased their effectiveness in the financial world. This has led to a more ‘democratic financial system’.
An ecosystem has been created in which customer costs are reduced, the customer experience is improved, and processes are made simpler and faster. The legal regulations have also led to the emergence of brand-new financial instruments. New tools such as prepaid cards, peer-to-peer (P2P) platforms that allow individuals to lend directly to each other, safer and faster mobile payments, and more integrated services have also started to be used.
FINTECHS STAND OUT IN BANKS’ GROWTH STRATEGIES
We see fintechs creating new transaction centers, customer sources, and business areas for banks. In particular, banks with few branches prefer to reach their customers through digital channels and business partners by adopting platform banking. This approach reduces banks’ dependence on physical infrastructure and provides access to a broader customer base through fintech collaborations. As of September 2024, the total number of active individual and corporate digital banking customers reached 117 million 302 thousand people.
In addition, in the first quarter of 2024, transaction volumes on open banking platforms grew between 25 percent and 100 percent Innovative solutions such as Collective Payment Systems (PPS) have contributed to the growth of the ecosystem by doubling transfer volumes. We can say that 2024 was a year with many important technological innovations in open banking. First of all, developments in API technologies drew attention. Advanced API infrastructures have made it faster and more secure for banks and fintechs to integrate with each other. On the other hand, digitalization is also affecting the number of physical branches. According to 2024 reports, the number of physical branches of banks is expected to decrease by over 25 percent. This shows that digital channels and fintech collaborations are critical to the future of banking.
In conclusion, the impact of fintechs in the financial sector has not only created a technology-driven change, but also made the financial system more democratic and inclusive. In the digitalized world, access to financial services has become easier and more secure, paving the way for a more efficient and dynamic global economy. With the development of the fintech ecosystem, we will of course continue to see its positive effects on the finance sector.
I would also like to emphasize the need for proactive cooperation with regulators to ensure the sustainable growth of the fintech sector and customer safety. In particular, the regulation of cryptocurrency and blockchain technologies is crucial to ensure a balance between innovation, security, and transparency. For the development of the sector, it is crucial to implement regulations that will increase the accessibility of financial technologies and encourage innovation. In addition, clear and comprehensive regulations on data protection and cybersecurity standards will support the healthy growth of the sector.
FINTECHS LEAD DIGITAL TRANSFORMATION
As is well known, fintechs conduct all their transactions on a technology-based basis. In this way, it has pioneered the digital transformation of all sectors, made users technology-friendly, and most importantly, ensured that all transactions are recorded, especially in individual trade. At Figopara, we adapt all new technologies to our business. For example, artificial intelligence (AI) and machine learning algorithms make lending processes more efficient by evaluating loan applications faster and more reliably. As Figopara, we implemented a scoring system, which is unique in the sector and already in operation to facilitate a business to access cash quickly, a good year ago.
Now we have introduced a new version of it for the real sector, with artificial intelligence technology. In other words, we have developed a model that allows companies to predict their own business risks. It works as an analysis and reporting system that makes it easier to minimize their risks in order to increase their trade volume, whether they are holding companies, SMEs, or small businesses. Innovations that bring many such benefits to the financial ecosystem are being realized through fintechs.