fbpx
Mytek Logo
MyTek Logo

What You Need to Know About the Growing FinTech Market

by | Jun 29, 2018 | MyTek Blog, Technology

Q

Subscribe To The Blog

By subscribing to the blog, you will be notified when a new blog post is created on the site.

For the economy to work in the way it needs to, money needs to be moving. Banks are usually one of the major money lending institutions, and because of that, they adhere to many regulations. There are checks and balances put into place so that people can use the system in the way it was meant to be used. But, there is a recent growth of marketplace lenders (MPLs) that change the way organizations and people can access capital and it is referred to as FinTech or financial technology. We’re going to take a quick look at FinTech (Financial Technology) and see how it is changing the way money is paid, borrowed, looked at, and managed.

MPLs are newly regulated, so they deal with fewer regulations than banking institutions do. MPLs use FinTech to collect, distribute and lend the capital they have. $7 trillion is at risk of being displaced from the financial services market because consumers have begun to catch on and they are growing. Legislators are now trying to figure out how to regulate them in a way that won’t hinder them but will keep them from taking advantage of their customers.

What is FinTech?

Fintech is the financial technology that is being used to manage and track finances. PayPal, your credit card, and your bank website are all forms of FinTech. While this technology isn’t new, it is slowly transforming and is being used outside of traditional bank settings. This is allowing investors to opportunities they didn’t have before investing in non-traditional ways through technology. These new Fintech models have many gray areas that are going to need to be looked at from a legislative perspective so they are further restricted. 

Payday Loans

While independent lenders have been around, payday loan markets have always been very controversial. The way they work is this: A person takes out a short-term, high-interest loan and if they can pay it back by their next paycheck, the lender takes a small fee and everything is fine. But, if the person can’t pay it back in time, the loan is renewed with added interest. If they can’t pay in time, the situation will get much worse for this person. Many of these loans have been outlawed in some U.S. states because of their predatory ways, but in states where they are still legal, FinTech lenders are challenging them.

LendUp and Elevate, which are FinTech lenders, are working to disrupt the need for payday lending by offering these companies small, short-term loans under very different circumstances. Instead of using predatory tactics, they work with borrowers so they don’t get in too deep and help people rebuild their credit in data-driven ways.

Let us know what you think about this topic in the comments!

ABOUT THE AUTHOR

Tim - Team

Tim Tiller, LMSW

 
Tim Tiller, MSW brings a deep service background to his role at Mytek, having graduated from McDonald’s management training program, fresh out of high school, and working his way up through the ranks in the hospitality industry. He has led two prior companies – Multi-Systems Inc., an IT-focused organization providing technology to hospitality companies (where he was named President at age 36), and most recently, as Chief Operating Officer for Jewish Voice Ministries International.

Q

Subscribe To This Author

By subscribing to the author, you will be notified when a new blog post is created by the author.

AUTHOR’S RECENT POSTS

Top 5 Hardware Monitoring Software 

Did you know that almost 40% of servers had at least one outage in the last twelve months? Veeam reports that the most common reason for outrages is infrastructure failure which puts the current hardware monitoring practices under the scanner. Hardware failures are...

Types of Mobile Malware & How to Defend Against Them

Malware has a long history of undermining computer security and stealing critical data. With the rapid growth of mobile usage, we're now seeing a new breed of mobile malware infecting smartphones and tablets. The new-age mobile malware are more advanced, seamless, and...

How to Protect Your Data Privacy & Enhance IT Security

Every time you use a device, you enter, modify or access data. Some of your usages are routine and public but sometimes you perform tasks that are confidential in your personal life or business. Naturally, this type of data is private and it should be kept that way....

Mobile? Grab this Article!

QR Code

Blog Archive

Generated by Feedzy
Share This