It is quite often said that by 2040, nearly all retail purchases (95%) will be made online. On the off chance that these predictions come true, the worldwide retail e-commerce level will reach $24 trillion. A big piece of the benefits of e-commerce for retailers will come from the online sales and purchases of e-commerce financial services. The fintech applications for e-commerce will enable retailers to capture a big share of fintech products sales.
Effect of E-Commerce on the Financial Sector
It has been evolutionary in how e-commerce impacts banking. Outings to a physical bank office are never again necessary by using the huge swath of online services offered by significant banks. This includes the rudiments of direct deposits of paychecks, online bill paying, and numerous other easy to use banking services.
Financial service companies that are in competition with banks can offer numerous things, besides essential banking, to their customers online.
Here are some ways in which that fintech and e-commerce sway each other:
1. Digital Currency and Cryptocurrency
Physical currency is being retired in numerous countries to be replaced by digital versions of currency. This may move to cryptocurrency eventually for its added security protections and usefulness.
2. Services for the Unbanked
In developing countries, billions of people don’t have a bank account. Moreover, a huge segment of people in developed countries, for example, 25% in the Unites states as reported by the CNBC, are unbanked or underbanked too. By creating e-commerce/fintech crossover services, online retailers may market their products and provide financial services to the organisation’s customers, thereby removing the need for a bank.
3. Permanent Digital Archive Records
Blockchain technology, which is a consequence of cryptocurrency applications, is currently used to make permanent encrypted records of financial transactions that are open. There will be no need for people to keep any records/receipts when they can access these permanent records online. The use of blockchain technology can reduce misrepresentation.
4. Artificial Intelligence and Big Data Mining
Artificial intelligence (AI) is quite extensively being applied to analyze Big Data and search for patterns. Online retailers can cross-reference acquiring movement with other Big Data metrics to predict behaviors. Behavioral analysis of customer patterns improves the effect of marketing.
5. Peer-to-Peer Transactions
Peer-to-peer systems have already come of use that disintermediate the customary fintech structures. Examples are peer-to-peer lending, crowdfunding, and available to be purchased by-owner (FSBO) real estate transactions. Where a instant, person-to-person, connection is easily made there is no need for intermediaries.
Most online purchasers mainly use a smartphone for e-commerce. Entrepreneurs can use a smartphone for bank card purchases with the use of a ordinary attachment that is beneficial to read a bank card. Thus capital transffering becomes so much more easier and immediate.
Utilizing AI chatbots for customer service and sophisticated data examination created by applying AI calculations to Big Data, it is now the common maeketingstrategem to personalize every customer’s experience to give them a more intimate and personal experience and satisfying expenditure.