We have witnessed a lot of change in the financial industry over the past decade. From the introduction of web-based financial services to completely online banks, the sector is being revolutionized in front of our very eyes. There has been a lot of speculations on whether the change is positive or not, but after years since the first initial steps towards a more digital financial system, we can clearly see that the impact is overwhelmingly beneficial for everyone, in all countries and under all circumstances.
Mobile banking is one of the most important innovations of this century. Many people today just keep ignoring the fact that this small at a glance service has completely shifted the way we use different financial services. No one will go to the bank branch anymore for just another money transfer or even to take a small loan. Everything can be done easily through the web. However, despite being generally an extremely invention, it is bringing in particularly major benefits during the troubling times of the pandemic.
Today when physical contact is the last thing anyone wants to do, we tend to use remote and digital services. This has worked really well as everyone from small business owners to schoolkids turned towards mobile banking. Thanks to the NFC technology and modern smart devices, paying at a shop does not even require having your plastic card on. Therefore, mobile banking has become one of the most important tools in the fight against the spread of the virus.
Besides its positive impact on public health, fintech has also proved to be particularly helpful in terms of rural financial support. Hundreds of millions of people residing in rural areas were left without any financial support amidst the socio-economic turmoil we have found ourselves in. agricultural businesses and their owners came under major pressure as food producers often were left with the excess amounts of product. They had to dispose of tons of dairy, fruits and veg because of the glitch in the logistical chain.
As a result, people in those sectors residing in rural areas need outstanding financial support to cope with what we are witnessing today. Unfortunately, millions simply do not have any easy access to physical financial services, left without an option but to travel and try getting business loans with extremely high-interest rates. Such loans are potentially quite damaging to small businesses.
Fintech and online banks provide residents of rural communities with affordable financial assistance. Interest rates are almost always much lower than with traditional banks that one can find in any country. Besides, the important factor is that the procedure of acquiring assistance is much simpler with online financial services in comparison to traditional commercial banks.
It is worth noting that fintech particularly benefits those residing in rural areas of developing or underdeveloped countries. Unline residents of graduated economies, people living across rural Africa, Asia and South America often face difficulties accessing financial services, primarily due to the lack of financial resources. India is a great example where fintech innovation is saving businesses and incomes for millions of people. The recent data from numerous Indian fintech services providers suggest that rural businesses, particularly those in the agricultural sector did much better under the circumstances of a pandemic than service-industry businesses in urban areas.
We should also always take into account that the structure of different economies varies a lot. Underdeveloped and emerging economies are often reliant on agricultural work and the incomes generated in rural areas. In simple terms, usually, agriculture is the only way of survival for millions of residents across vast rural areas. Therefore, saving businesses and jobs is particularly crucial for the integrity of such economies.
Fintech is doing exactly the right thing in these grim times. By providing affordable and rapid financial assistance to rural businesses and individuals, the sector is saving other industries and rural economies. Will this pattern continue to occur after the pandemic ends completely? It is difficult to say now, but we had already been seeing numerous examples of fintech benefiting rural areas prior to 2020. Therefore, it is expected that fintech’s contribution to rural communities and their economic livelihood will soar even further throughout the years to come.