4 challenges that the fintech industry will have to face in 2018

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pappu857
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4 challenges that the fintech industry will have to face in 2018

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Some people predict a future in which bank branches will no longer exist and the online world will become the only place where citizens can manage their finances in a quick, convenient and much cheaper way.

In fact, there are those who go even further, betting on the disappearance of physical money, which will become virtual, with all the benefits that this entails, above all, for the control of the economy of countries.

And, taking into account the data we obtain on the evolution of online banking, this does not seem like such a far-fetched scenario. In 2016, according to Eurostat data, 43% of Spaniards aged between 16 and 74 used online banking, 4% more than in 2015.

If we add to this the 20% reduction in the number of ATMs on the streets of our country since 2010, according to data from the Bank of Spain, the transfer of the banking industry from the offline to the online world seems more than obvious.

Improving the security of these transactions is one of the most important drivers that encourage more and more citizens to opt for these systems. Encryption technology is one of the most widely used technologies by banking institutions today in order to ensure the security of their clients' highly sensitive data.

But efficiency is also key in the adoption of these systems, as 87% of Spanish users slovenia phone number consider that the adoption of mobile banking has helped them improve their finances, according to the Ditrendia Mobile Report in Spain

User interest has been increasing in recent years, with an average of between 100,000 and 500,000 downloads per app and 1.61 billion euros in electronic transactions at the end of 2016, i.e. 3.17% more than the previous year.

The huge variety of products and services that banks offer today, all within a click, from making transfers, opening a current account to checking transactions, add reasons to the list of users to opt for this financial option.

The online world eliminates obstacles, streamlines processes and allows us to do away with the much-hated commissions by eliminating intermediaries.

However, although electronic banking is already a reality in our country, its adoption is still 6 percentage points below the European average, which shows the challenges that national banking has to face in the coming years, until reaching levels of countries such as Norway, where 91% of citizens use electronic banking.

But what are the barriers that the sector must overcome?

1. Financial education
The lack of economic and financial information that exists among the population means that, at this point, distrust towards electronic management systems remains notable.

Although the situation is alarming, since according to the PISA report, 1 in 4 children are not able to solve simple economic issues such as understanding an invoice, banking institutions have already begun to provide solutions through initiatives such as the Financial Education Plan of the CNMV and the Bank of Spain.

Providing citizens with the tools, knowledge and skills necessary to make decisions related to their economy will be key to accelerating the mass adoption of electronic banking.
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