Mitra Ferdows, a graduate of Business Management from the United States’ Loyola Marymount University and a consultant in different startups, expressed her views on the financial industry.
Mitra Ferdows in a webinar with FinTech startup founders and angel investors stressed that most FinTech companies are real innovators and try to reduce costs and improve productivity by using out-of-framework business models. “Good loan markets and crowdfunding platforms are examples of these business models that provide capital to businesses at the lowest cost and in the fastest time.” She said during this webinar.
“The term financial technology can be applied to any kind of innovation in the way people interact with a business, from the invention of digital money to the double-entry accounting system. With the advent of the Internet revolution, and especially the mobile Internet, financial technology has grown so much that it is no longer limited to computer technologies for offices, banks, and businesses, and there are now a variety of technological interventions in the personal and commercial realms of assets, covers finance and investment. According to the FinTech Adaptability Index, one-third of consumers use at least two or more services in the field of financial technology, and these same people believe that this technology has become an integral part of their daily lives.” Mitra Ferdows said about the effect of the FinTech industry in our lives.
Mitra Ferdows continued that although startups active in the field of financial technology are increasing day by day, it is still an emerging field because the financial industry has been relatively slow to adopt the technology. “At present, the financial industry applicating technology is low, compared to 40 percent for digital media and about 10 percent for e-commerce. One of the reasons for the slow slope of technology adoption in this industry is the existence of a complex legal environment. According to a report from the Foundation for Technology, Information, and Innovation, the existing regulatory environment is designed for older business models, so it is not suitable for new startups in this area, and also, there is not much support from policymakers to change this regulatory environment,” she added.
Mitra Ferdows added that the development of FinTech is highly dependent on geography; So that the direction and areas of development have been different in different countries. “The most important reasons for this geographical dependence have been regulatory divergent, differences in the status of the traditional financial system and the capabilities of the actors in its sub-sectors (banking, insurance, capital markets, etc.). Of course, the impact of other resources that facilitate the development of FinTech in each country cannot be ignored. These include a large market, a favorable business environment, the presence of venture capitalists, a knowledgeable workforce, and so on,” explained Mitra Ferdows.
Indeed, rapidly growing regional financial systems mean that local actors can quickly gain good market share, but international growth will not be easy because, as noted, differences in regulatory priorities, the technological capabilities, and different conditions of customers in different parts of the world have made the process of globalization of FinTech a serious problem and have led to the formation of different patterns based on geography.
Mitra Ferdows, which is also an angel investor in many startups, reiterated that however, the pace of change in modern countries FinTech has been able to bring to the traditional system is not as fast as that of a country like China. “Before the advent of FinTech, Chinese society did not have high financial inclusion, so in China FinTech quickly became financial giants, filling the gaps in the traditional system. They have easily taken over the large market share of this country. The financial inclusion created by FinTech serves many individuals and even small and medium-sized companies that did not previously have access to banking and financial services and is a revolution in the country’s financial industry. In other words, the mobile-based ecosystem, in the absence of a customer-centric banking system and the right regulatory system for innovation, have all led large technology companies to take over the dominant market share in financial services,” said Mitra Ferdows.
Mitra Ferdows added that the financial services sector is highly sensitive and risky, which has led to very strict regulations by government agencies for monitoring and control; At the same time, new technologies are causing rapid change and increasing risk in industries such as financial services, creating challenges for oversight, which has made financial innovations a constant problem for regulators, including central banks. “In developing and emerging markets, businesses in the industry also face the problem that there is a need to address a number of issues based on global trends, including assigning and clarifying the boundaries of FinTech regulatory bodies, involving stakeholders in drafting legislation, and using advisory opinions. On a large scale, creating test environments in the form of sandboxes to accelerate the safe entry of innovations into the business environment, strengthening national authentication and accreditation systems, unifying regulations and standards for the expansion of FinTech operations, in a wider geography, protection of consumer rights and reducing the associated risks, enabling cooperation between FinTechs and traditional financial institutions should be on the agenda,” Mitra Ferdows concluded.