How the Fintech innovations are influencing and shaping the future of the traditional financial system

Szász Eszter (2021) How the Fintech innovations are influencing and shaping the future of the traditional financial system. Külkereskedelmi Kar.

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Absztrakt (kivonat)

This thesis work is focusing on the financial technology innovations and their influence on our traditional banking system. In case of my work, I had to consider multiple factors in choosing the final topic. Firstly, the reason behind this choice is the reality of digital financial services particularly emerging. Fintech innovations have become essential in our lives, especially in keeping up with our economic activities, which moves forward in a swift pace day-by-day. Its popularity has been emphasized over the years and now the new and innovative financial technology is at its peak and in the context of adaptability, FinTech is contributing to serve vulnerable market segments. Secondly, the COVID-19 pandemic has continued the support in expanding financial technology market approaches and improvements. Last year’s crisis has influenced our life toward apperception. Awareness and functionality revalued the e-commerce space, mostly in the descent costs and needs for face-to-face interactions of services provided and accessibility to a mass audience. These factors have greatly influenced further solutions in financial technology. Thirdly, I have started my internship program as a financial advisor at Aegon Premium this March. As a member of the Aegon Group I have participated in many vocational trainings aiming at the post Covid insurance and investment sphere. How new market approaches and consumer demand creates challenging financial strategies in different sectors and how can we aggregate the new global and local needs in Hungary. We have only started to explore how these approaches are accelerating unprecedented demand and interaction from developing countries’ financial services despite the fact, that the most progressive FinTech companies located in stronger markets. The investment culture and strategies, in case of big investment banking companies like JP Morgan, Blackrock, Fidelity or Franklin Templeton, are shifting towards those fintech approaches, that put the focus on technological development, personal customer services, environmental social governance and many more. I have had the chance to research in this field during my academic studies in the university. My first-time meeting and learning about this topic were during my International Finance classes. With the help of my professor, I have developed a deeper interest towards this topic, even constructed an essay about various fintech applications’ functions and their backgrounds. The purpose of my thesis is to show how the new and emerging FinTech models are influencing our institutional banking system and our habits as well as our social norms. I would like to place the traditional banking system and the FinTech industry in opposition. In my paper, I would like to answer what is going to influence the financial culture of the future. How the new era of financial technology and assets are working and transforming our traditional banking system and the institutional structure. And after all, what happens with the overall judgement of these new developments in Hungary, what kind of challenges are waiting ahead. My paper contains both primary and secondary research elements and follows a deductive approach in unfolding the key elements of fintech. I have been gathering data mainly from the Internet, from official websites engaging in research articles, books, and studies, such as ScienceDirect and Google scholar. The reason for collecting and learning information from online platforms, is that I have found very few current information regarding the fintech topic in the library. I decided to turn toward the Internet, however I am very aware of its disadvantages. I sourced existing data primarily from research articles and books and of course through many statements and scientific articles written by investment banking companies. The primary sources of my research have helped me underline and complement the purpose of the thesis and helped me achieve a greater understanding in the world of financial technology. I believe questionnaires are particularly well suited for research and can be used to collect both quantitative and qualitative data. I decided to create a study about financial awareness and openness in case of new innovations in financial technology among Hungarians. During the writing process, first I have constructed the framework of the thesis, first the broader topics and chapter titles I would like to write about, and then narrowing it down to the subsections. When I finalized my thoughts and the final line of the thesis, I prepared my own questionnaire, which results I have placed it at the end of my work. In the four chapters of my paper, I follow chronological order, showing the line of development of the Fintech innovations. In the first chapter I am covering the brief history of how FinTech has evolved into more than a worldwide phenomenon and investigate the significant models of its ecosystem. Highlighting the most important elements from technology developers to governments. In the second chapter I will discuss how the COVID-19 pandemic changed the financial sector and the Fintech trends and how the regulation of these trends is working in the post-covid era. In the third part I examine the new challenges for Fintech innovations and how the traditional banking system is coping with the new horizons. And finally, in the fourth chapter I unfold the finding of my study, how Hungarians are conceiving the Hungarian financial system, how informed they are, and their openness toward fintech solutions. As we've seen, getting to where we are now took a lot longer than the incredible rate of change we've seen in the last two decades. After sixty years of waiting for the first cash machine, apps and systems that update in our pockets on a regular basis are set to dominate how we manage our money. The financial industry has had to modernize in order to keep up with other industries because fintech has significantly improved technical firms. Fintech adoption is expected to soar in the next years, posing severe threats to traditional banking. They were even thought to be behind the times when it came to Fintech. As a result, banks must get more actively involved in the Fintech movement in order to prevent long-term ramifications in the next decades. Traditional banks, on the other hand, have long dominated this industry, providing them with a solid financial foundation and a larger customer base. They have significant resources as well as a strong desire to innovate in order to keep up with technological improvements. As a result, banks will be able to collaborate with Fintech start-ups to investigate and test new ideas, and will be able to offer new digital services with more cross-selling potential, reduced costs, and longer-term growth potential. Every fintech era has been distinguished by the use of technology to make banks more accessible to their consumers, and as technology progresses, so do people's and businesses' financial management approaches. Despite any short-term setbacks, this approach hasn't changed. As a result, basing your own product's future trajectory around the customer experience is likely to be a very future-proof strategy. The findings demonstrate how the COVID-19 issue has offered opportunities for fintechs to grow and customize financial services, assisting small businesses and low-income individuals in becoming more financially resilient. They've shown operational endurance and adaptability, forged new alliances, established new customer acquisition strategies, and relocated inventory to meet client demands. The most essential need for fintechs is still connection to a community of investors and capital in order to keep innovating. It's up to investors to rise to the challenge and equip fintechs with the resources they need to satisfy today's expectations.

Intézmény

Budapesti Gazdasági Egyetem

Kar

Külkereskedelmi Kar

Tanszék

Nemzetközi Gazdaságtan Tanszék

Tudományterület/tudományág

NEM RÉSZLETEZETT

Szak

Nemzetközi gazdálkodás

Mű típusa:	diplomadolgozat (NEM RÉSZLETEZETT)
Kulcsszavak:	banks and banking, e-banking, financial culture, financial futures, internet banking
SWORD Depositor:	Archive User
Felhasználói azonosító szám (ID):	Archive User
Rekord készítés dátuma:	2023. Ápr. 22. 08:42
Utolsó módosítás:	2023. Ápr. 22. 08:42

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