The recent global recession and global financial crisis alerted much of the world’s economy and encouraged innovation in most sectors within many industries. However, one area that lacked innovation was the one sector that sparked the global financial crisis in the first place – the banking sector.

Many expected a turn of events in the baking front, such as changes in the reforms and innovations affiliated with banks and other financial institutions, but this was not the case. Fintech startups have come in and tried to fill in that void, introducing new innovations and finding ways to navigate the banking regulations to allow for an effective, quick and consumer friendly financial operation.

Global investment in Fintech startups has more than tripled over the last year and as of last year $3 billion was invested in Fintech startups, a clear testament to the quick growth of these savvy financial institutions. Most financial strategists expect this trajectory to increase even further, which could put traditional baking at risk of disintermediation.

“Cash, credits cards and checks were not designed for the internet and the banking system has not yet caught up with that and with the vast growth in internet users (about 21.5 billion) and new technology innovations, its crucial to have a financial system that integrates well with the internet,” said Sonny Singh, Bitpay officer.

While the number of people with access to the internet continue to increase, those with access to banking systems or institutions continues to grow at a slow rate. This has created a vacuum when it comes to banking: a vacuum that fintech institutions are capitalizing on.

The global financial meltdown of 2007-2009 has also contributed to the quick acceleration of Fintech startups. “Every American poll shows that trust in banking institutions has collapsed ever since the financial meltdown,” asserts Rich Karlgaard, economic forecaster and Forbes magazine publisher.

He added, “coming out of the recessions most banks have poured tons of liquidity into the system and this has seen a decrease in the value of the currency, which has manifested itself in asset (such as stocks, collectibles etc.) value depreciation.” This feeling that the dollar has decreased in its value, coupled with the mistrust brought on by the meltdown has further fuelled the increasing popularity of Fitnech startups as financial service providers.

Another factor that Fintech investors and entrepreneurs are capitalizing on and has grown hand in hand with the Fintech sector is the millenials. Consumers are changing their attitude towards their finances and more are looking to be more involved and learn more about how their finances are managed.

Millenials are seen as more conservative and less trusting of banks than Gen Xers and baby boomers. They are increasingly drawn to emerging financial technologies and non-bank services that are at the forefront of change within the financial space. Startups are leveraging on millennials, who are looking for a faster and efficient financial systems that allow them to carry out across the body transactions.

Banks and other traditional financial systems tend to be more regional or local, unlike Bitcoin and other Fintech startups that open consumers to essentially a global currency. “Bitcoin is based largely on the young generation with 40% of our clients based in the US and 60% in other countries,” said Sonny.

There are many sectors of banking that are being disrupted by Fintech. These include wealth management, lending, digital identity, direct to user financial management, also known as lifestyle banking, whereby Fintech companies are creating ways to integrate banking into the day to day lives of their clients, bringing the banks to them.

While innovation has proven a strong suit for most financial institutions, no new significant ideas have been coined towards the banking sector. Even a few people have left their bank jobs to launch their own startups, seeing the value in innovation and technology within the financial sector.

The lack of innovation in the banking space can be largely attributed to archaic regulations that continue to plague the sector. Arrays of rules that make it near-impossible to introduce new products into the space are making it even the more frustrating for innovators and start-ups.

While this may seem like a big set-back for most startups, it can actually be an opportunity that investors and entrepreneurs can capitalize on. If Fintech startups can manage to navigate their way around specific regulations, hopefully under the guidance of a regulation lawyer, then those regulations become their barriers safeguarding them from the competition.

This much needed breathing space is especially crucial now more than ever because new non-bank tech giants such as Amazon, Google, and Apple Pay are coming into the financial sector to help consumers manage their day-to-day finances. However, it’s still important to keep in mind that it’s still a financial space, and Fintech institutions, even though digitalized, will still be dealing with consumers’ money, something that is very person and emotional.

This is probably why the rules and regulations were set in the first place, to protect the institution and consumers and allow for a smooth process. With that in mind, Fintech startups still have to follow the set regulations and rules. With the competition slowly increasing, most start-ups are probably wondering how to succeed in this space.

“I think everyone will have to find what works best or the winning ecology, which will be a summation of technologies and ideas from different startups,” says Joseph Polverari, managing director of Yodlee Interactive.

The economic revival that is currently at hand promises to shake up the Fintech sector, with more investments and interest from venture capitals and other businesses. Investors tend to look for opportunities that present huge exits, and with Fintech’s global vastness, it presents a highly attractive investment opportunity.

These investments coupled with a new way of thinking about money, greater capabilities of the internet, especially with mobile phones, and the increasing number of people that are striving to be more involved in their finances, gives the Fintech sector a healthy prognosis.

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“Financial Tech is Exploding: Panel of Experts Discuss How to Capitalize,” Venture Beat, October 7, 2014,