Fintechs or collective innovation at the service of finance

Jan 13, 2023 | Publications

Fintechs have accelerated the digital transformation of the banking sector and continue to do so. Their mastery of technology and finance allow innovation in a slow sector.

The arrival of fintechs has precipitated the digital transition of banking and financial institutions. While part of this digitalization has taken place internally, alliances and acquisitions have been made to integrate the disruptive solutions of these finance startups. Today the French market has more than 700 fintechs whose innovative offers address a wide spectrum of applications: credit for individuals, professional financing, payment, wealth management, risk, insurance, etc. Each of these solutions contributes to innovation in the banking, finance and insurance sector.   

As the number of consumer credit applications grew in 2022, payment defaults also increased. Thus, according to the latest barometer of financial inclusion from the Banque de France, more and more French households cannot honor their loans. Last July, there were 58 additional people registered in the national file of payment incidents (FICP), an increase of 135% compared to 30. A situation which risks becoming even worse, with galloping inflation and the energy crisis that we cross.

In this context and faced with a ceiling in the usury rate, banks are witnessing the erosion of the profitability of certain products such as mortgage loans or loan consolidation. A situation to which are added defaults in reimbursements, payment fraud and identity theft. In short, a complex environment that forces banking and financial establishments to put in place faultless solutions and subscription processes to collect all the essential elements for the assessment of solvent profiles. But such an estimate requires appropriate scoring tools. Thus, the KYC (Know Your Customer) procedure allows financial institutions in particular to ensure the identity of their customers and to check, often in real time, the compliance of legal documents (identity documents, proof of residence, tax notice, etc.).



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