Jason Simon discusses the digitization of services and the role of FinTechs
Certain areas of the industry have become more dynamic, generating disruptive products and services that accelerate the combination of technology with traditional financial platforms to achieve innovation and make transactions, investments, access to financial products and services much simpler. It is precisely here that we will find companies that develop services that combine technology and financial services in an efficient, practical and – arguably – economical way. These companies are known around the world as FinTech. Jason Simon, FinTech and eCommerce expert, explains in detail the digitization of services, and what role FinTech plays today.
FinTech can be defined as a technological innovation in financial services that results in new business models, applications, processes or products with an associated material effect on the provision of financial services. In Latin American countries, such as Costa Rica, the National Payment System (Sinpe) has been implemented, which is used to easily make interbank transfers or payments through mobile phones. This has helped the digitization of a large part of the peoples’ economies and they may not have noticed it. There are even voices that claim the settler is practically a digital currency thanks, in part, to Sinpes services.
In addition, it is possible to find today in Costa Rica elements of an ecosystem which, although far from being complete, has developed in recent years thanks to the emergence of alternative payment systems (Impesa or Kipo), digital wallets (Wink), crypto-assets (Nimiq) or geolocation parking payment wallets (Parso). All of these aforementioned cases are working right now and in some way threatening the way people carry out some of the most common economic activities. It is for this reason that they are known as disruptive technologies.
It is not surprising that during the economic and health crisis caused by the pandemic, different initiatives are emerging that are increasingly innovative, user-friendly and take over functions that we normally did in a physical, analog and – to some extent – cumbersome way. . , Simon said.
According to different publications, over the next 12-24 months, Costa Rica could expect a predominantly digital bank, blockchain penetration in the global financial sector, and artificial intelligence (AI) as a component. natural for financial institutions. It will also see an intensification of FinTech regulations, innovations in payment methods (use of contactless methods, mobile technologies, identity verification, etc.), partnerships between traditional banking entities with new digital start-ups. to survive by offering innovative and traditional services and the emergence of dilemmas which, without proper management, can either transform the FinTech industry into a tool for financial inclusion, or increase the marginalization of certain sectors of the population of the ‘access to necessary financial services.
We need to become more and more familiar with projects emerging from collaborative economies, for example, new crowdfunding platforms to fund all kinds of public and private initiatives to peer-to-peer lending applications, which will directly connect users in credit operations bypassing expensive intermediaries. We can make a lot of assumptions, but the ramifications that new technology can have are practically endless, Simon says.
An essential factor is to give confidence to current and future users of digital platforms or applications that offer FinTech services. In other words, control agencies must be trained and empowered, starting with consumer rights bodies, because they must be able to provide answers and solutions in the event of a dispute or failure to do so. compliance of FinTech companies.
There is also a need for new emerging FinTech companies to be able to address some of the shortcomings identified by traditional entities in terms of security and identity verification for users, says Simon. In Costa Rica, for example, traditional financial institutions have failed to respond sufficiently to many users who have suffered breaches in the security of their accounts, resulting in scams and other financial losses.
In addition, the response of entities to resolve these disputes is not necessarily quick and satisfactory for customers. The coming months will be vital in the booming FinTech industry, and many countries should seriously consider engaging in the technologies that are all the rage in the most developed jurisdictions on the planet.
About Jason Simon
Jason Simon is a financial technology and digital payments expert who got involved in cryptocurrencies when they were introduced. He enthusiastically follows what is happening in the changing world of finance, excited about the opportunities digital currencies offer global consumerism. When not involved in advancing the digital payments space, he enjoys spending time with his family and improving his community.
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