FinTech has become so disruptive because technology is now striking at the pillars of the financial institution. Those long-standing institutional pillars include private equity, insurance, capital markets, and legal and regulatory banking –and they’ve long been static. The updated FinTech industry has sparked a financial revolution. There are many changes occurring industry-wide, often to the benefit of consumers. However, at the banking level, there is a feeling of disruption.
B2B (Business to Business) fintech model focuses on altering the institutional pillars, affecting how a business uses institutional pillars to acquire capital and services. It causes issues for long-standing institutional pillars of regulatory, insurance, legal, and banking. There are five subsectors of B2B Fintech, including insurance (InsurTech), legal, alternative finance (Altfi), banking, and RegTech.
Banking is a segment of FinTech is one that was hardest hit during the early days of Fintech because banks made the mistake of dismissing early entrants as trendy or “fly by night.” However, they quickly learned that those things, once thought to be trendy, became part of the norm, and banks felt hit on all fronts: wealth management, business, consumer, and other subsectors.
The legal sector seems as though it can’t be pushed or disrupted, but that belief is only partially true. It’s true that lawyers will be needed for the expertise, to offer operating advice to business, but technology is changing the way that lawyers work and the way services are delivered to clients.
Businesses no longer have to shell out high payments in order to have a contract drawn, documents created, or construction of entities. Technology will never totally replace lawyers, but lawyers who embrace FinTech Legal understand the massive evolution the industry is enduring, and they’re attempting to stay relevant and competitive.
Insurance is among one of the oldest establish financial industries, and InsurTech is the offspring of the stagnant industry, which benefits for little innovation. FinTech insurance companies have opted to shake things up, drafting changes that benefit the companies, by ridding the industry world of pricey institutional ways of servicing clients and operating.