Why Should FinTech Startups Use Blockchain Technology?

Blockchain technology is critical for FinTech firms looking to handle their finances and operations, attract investors, and remain ahead of the competition. Blockchain allows for the secure transfer of digital assets between corporations and people. It contains not only cryptocurrencies but also data and any type of digital or tokenized asset. Use of digital assets to maintain digital communication has become increasingly important for firms, especially for FinTech startups. The FinTech sector is trying to improve people’s lives by addressing issues that are very common in a non-competitive environment at present. Still a lot of FinTech firms are facing challenges, such as a low market demand, a lack of finance, and huge competition. 

Blockchain technology can assist finance businesses in overcoming these obstacles. It can save money and create a customized economy based on the demands of their company. Blockchain technology can actually help FinTech companies to operate with no middlemen. It can offer efficient solutions such as smart contracts and a peer-to-peer network. And even without these particular advantages, blockchain-based solutions are attracting more interest from investors everywhere. Blockchain and cryptocurrency investments increased sixfold in 2021, totaling $32 billion. By the year 2024, investment in industries looking to deploy blockchain-related solutions might total $19 billion. 

Blockchain’s higher level of security, transparency, and automation are among the characteristics that attract investors. The banking industry accounts for the lion’s share of the blockchain market. FinTech combines finance and technology, with financial services and business payment solutions as two of its main components. Blockchain enables faster and more seamless cross-border transactions. This can benefit FinTech startups and businesses. Despite the close ties between FinTech and banking, the two business sectors are sometimes perceived as rivals. Blockchain solutions may be even more essential from a FinTech standpoint, as FinTech’s strength makes it increasingly difficult to see it as only a supporting industry for banking.

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