Fintech: New Finance for the New World


A Code-Brew Labs Analysis




The advent of digital technology is reshaping many industries, and the financial industry is no exception. When the world of finance merges with innovative, disruptive technology that is changing the way it traditionally operates, we observe the synthesis of what the world calls ‘Fintech’, literally a portmanteau of the two words.

The Fintech industry is relatively new. The does not seem to disturb its steady growth and adoption worldwide. There are obviously a slew of factors responsible for this, which we will discuss in this article.

This article will also provide an industrial overview, giving readers a cohesive idea of what Fintech is – while outlining the various challenges faced by the industry.

Lastly, the article will conclude by formulating general solutions for these challenges, augmented by technology. Since we at Code-brew provide Fintech related services, our aim is to posit our understanding of the industry in a thorough manner – our solutions can only be as good as the knowledge we possess.

Ultimately, the effort, as with all Code-Brew Analytical pieces, is to arm the reader who wishes to enter this industry, or utilise it for their own business with the relevant knowledge.

Fintech: An Overview

Even if you do not necessarily read about such things in tech-based journals, or are not inclined towards the Financial App Development – you don’t need anyone to tell you that the way in which financials are being utilised in itself is changing.

Many countries already experience cashless realities. Huge amount of capital is simply ferried in a matter of seconds in the virtual realm. Your card has become the one-stop-shop for almost anything, a currency of its own. Your payments might not arrive in neat, enveloped cheques, but your phone certainly pings in anticipation and response, informing you o1f the increasing balance in your bank account.

Even the way funding is done is changing, with seed aggregators and combinators and the crowdfunding modes available today – the realisation of your business dream only needs the right amount, at the right time, and the right seeding momentum.

So in these changing realities of finance, the traditional methodology of operating, shifting and manipulating capital is changing. Technology has entered the mix, disrupting existing ideas of the way the financial sector should function.

This dynamic interplay, as PWC terms it, is where the phenomenon of Fintech can be found, and it is an industry unto itself. The new industrial mesh is also called the Fintech ‘Ecosystem’ because of the industries and platforms it connects with its extensions.

Fintech aims at reimagining every sort of financial activity – from transactions, to banking, wealth management, and investments and so on – with technological innovations.

What does Fintech contain within its ambit?

Well, there are several aspects to the Ecosystem – further divided into subsections. It primarily consists of

  1. Governmental Institutions
  2. Financial Services Companies
  3. Fintech Startups

The sectors dominating this industry are several – Consumer Lending, Business Lending, Institutional Advertising, Financial Security Specialists, Crowdfunding, Banking Infrastructure, Point-of-Sale payments – the list combines nearly 16 such specialisations.

The industry is experiencing healthy growth. In 2015, the amount invested was to the tune of $19 billion, which was more than triple the amount invested in 2014 ($5.6 billion).

A Business Insider report also states that investments by August 2016 had already hit $15 billion, so this year is definitely posited for more. Venture Scanner has a different figure, far exceeding these -$33 billion, with funding garnered from more than 1,379 companies.

The US, Europe and Asia-Pacific regions lead the pack of Fintech investments, with China being a particularly noteworthy player this year. The fact their economy has been shifted to the consumption model as compared to the production-based one is perhaps one reason to diversify into this realm.

While earlier, venture capitalists were cited to be major source of growth for this industry in terms of pumping in investments, this year shows a lot more funding garnered by private companies and seed aggregators.

This clearly indicates that more players are entering the field, aware of Fintech’s potential – note that this increase was observed over venture capitalist investments themselves growing by a whopping 63%.

Mounting Challenges

The challenges in this sector outline certain hurdles for the old brand of financial firms. This posits adaptive and malleable concerns for these firms when it comes to integrating technology in their existing systems.

For the newer players, there are a host of other challenges to overcome. So what are they?


The banking industry feels that it is not quite ready to withstand the full disruptive force that tech represents. In fact, it’s not really out of ignorance that the concern arises – most bankers are very well-aware of the disruption. However, it’s the pace that is hard to adapt to and manage. As many as 72% of senior industry executives feel that digital innovation has fragmented opportunities and no targeted strategies as concerns existing systems. Less than 25% of the 180 billion spent in 2015 was in new investments like fintech-based tools.

Unicorns and other noteworthy start-ups are carving out the market share – take Venmo, a company that is now a subsidiary of Paypal and rose to unicorn status in just 4 years. A McKinsey report stated that Banks could lose around 29 – 35 % of their revenues to the new attackers via customer churn and shrinking margins. This change and speed are something incumbents need to take note of and begin the adoption now.

 Alternative Business Models

Investments for this sector might be increasing, but still remain a concern. In that light, alternative business models are now all the rage in this era of reinvention, and fintech aims to do that.

What will be key is getting revenue back by using dynamic pricing and other systems in order to thrive in the market for more than a matter of a few months – which is the case with most start-ups.

What will also be interesting to observe is how extant banks tackle these systems when they wish to innovate their own, and how the change will be engineered.

The Iron Hand of Regulations

Many economic crises and hurdles later, the world of banking and finance is governed by an iron-clad mesh of rules and regulations – the fear of this sector getting compromised is far too much. The uneven playing field between the slow moving, mammoth financial sector and the agile, fast-faced world of Fintech may just be a problem for regulators.

The rulebook for Fintech is being written, and in its absence, the ambiguity and vagueness plaguing the Fintech business is calling for a reactive approach – which many Fintech supporters consider ‘restrictive’.

Security Concerns



With Fintech aggressively advocating for digital transactions, and the volume of money it may deal with when these transactions are carried out, security solutions will be a big concern. The rise of financial malpractices and hacking activities only serve to underscore this concern – if compromised, the reticence to adopt will be great.

Consumer Reticence & Acquisition

While consumers do not particularly distrust Fintech companies, making the switch from traditional finance has met with a lot of reluctance.

A 2016 ITA Markets report on the Fintech industry points out that – 53 % said they were unaware the products existed, 33 % said that they do not have a need to use the products, 28 % preferred to use a traditional financial services provider, and 21 % said they do not understand how the products work.

Thus, spreading awareness amongst potential consumers and empowering them with knowledge will be extremely necessary to overcome this hurdle.

Consumer acquisition in general has been a big problem, with them already having deep-rooted relations with older, conventional enterprises and firms.

Add to that the depersonalised nature of consumer service that plagues the Fintech sector – and you’ve gotten yourself quite a challenge.

Inception and Expansion

Getting the right tech to start your Fintech venture together can be a tough task, especially with the market being inundated with firms providing services from all avenues. Even tougher is maintaining that infrastructure and differentiating oneself from the competition – which can only mostly be done by tweaking user experience and maintaining a good track record.

The costs of sustaining such a venture can also be considerable if the expansion is too fast, and the IT does not scale up accordingly.

Our Offerings and Take

The Fintech industry is seeing a lot of technological integration – but what is this technology that we speak of? Here, we outline several of those technologies which we also see as potential solutions to many challenges that the sector presents.

Our offerings in this system are directly related to what we can actualize for you, if you decide to enter the world of Fintech with your business venture, or idea.

Blockchain Technology



The defining cornerstone for all things Fintech, blockchain technology is also behind the virtual, untraceable and secure currency – Bitcoin. The way in which a blockchain functions, where each subsequent block stacks over the previous one and cannot be retroactively edited, is highly effective for secure transactions online. The time-stamp functions and peer to peer interconnectivity – while NOT requiring third-party monitoring due to its cryptographic functions make this highly valuable to Fintech.

This tech is posited to be at the heart of transactions, and is also determined to be highly cost-effective.

Mobile First


Fintech is agile, much more so than the financial sector that it came from. Most of this agility comes from their adoption of highly mobile systems in their infrastructure. Immediacy, convenience and security are what mobile-savvy consumers seek when they look for any on-demand, accessible service in their ambit.

Fintech’s adoption of mobile payment gateways, online transactions that are safe and secure and lastly, integrating the whole banking experience in one seamless app is what is drawing consumers. The rise of digital wallets and other such is an indication of this trend. In that, mobile POS (point of sale) technologies have become very important for new and extant businesses.

Customer-centric Approaches



With technology making most things transparent, cultivating the ideal customer appearance when it comes to Fintech services is key. SaaS solutions and open gateway technology, along with UI and UX design being the front-ends of said technology will benefit tremendously, if applied with a high degree of finesse and expertise.

Catering to holistic and adaptive solutions with each consumer being treated as a decentralized whole will be crucial for banking companies if they want to possess the competitive edge.

Automated/Autonomous Wealth Management



Robo-advisors aren’t really far from being integrated into the consumer banking experience – or other financial aspects, for that matter. These robots can function as automated tellers or even provide advisory capabilities when it comes to wealth management, since they have been posited to integrate big data, analytics and cloud computing solutions into their processing.

While representing a job-threat to many tellers, the safety, security and efficiency of automated wealth management is far greater – in addition, minors, millennials and other individuals unaware of financial intricacies can trust these enablers to manage their wealth safely.

Fintech wealth management as a whole is becoming more data driven – so big data and analytics are immensely important factors for speedy growth and adaptation.

Telematics and IoT

Payments on the fly, or highly ingenious payment systems are coming into the fore with telematics and the IoT approach. Smart contracts embedded in cars, ‘pay as you drive’ technologies, remote access to financial portals – be it on a wearable, or a smartphone that can assess your financial mannerisms – the potential is near-limitless.


To bridge the gap between traditional financial institutions and to remedy the problems of obsolescence, collaboration between the two realms seems to be the most promising solution. Technologies that can act as this bridge can only be provided by smaller Fintech firms that have the edge on legacy banks, since they’re low on capital etc. but high on cutting edge-tech.

In conclusion

As can be anticipated, it is a very exciting moment for the world of Fintech. The sector will surely face tremendous disruption with every new technological innovation.

We consider it our duty to inform potential clients of the perils, and advantages to be found in every sector. We also consider it our privilege to work with those who are interested in augmenting their ideas with powerful technology. We are eager and only too happy to walk you through the possibilities of these measures, targeting key concerns in the sector itself, so that your business can bloom with minimal hitches.

All the technological solutions mentioned above – in the realm of big data, analytics, mobile app development, the engineering of virtual architecture and so on – can be found by working with us, in the most cogent manner possible. We will be honored to help your venture disrupt the Fintech vertical – all you need to do is take the first step, and open a dialogue with us.

January 16, 2017



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