In ‘FinTech’ in their nature serve as opportunities,

ancient times there were the knights with shields and swords, but time goes
by, it all evolves, and in today’s world our shield and sword is data we got.
Data makes you politically and economically strong, here we are speaking of
different types of data – scientific, economic, financial and etc. Fintech is
the main tool to systemize it and make it easier to read and analyze. As of
now, non-banking FinTech is involved in all kinds of fields, from making
transactions to being an advisor for businesses. Unfortunately, in the modern
world, our society and economic ecosystem are not developed enough as we are
several steps behind the developed societies. Our FinTech ecosystem does not
satisfy the basic needs of users (enough to mention that up to this date
Azerbaijan issued 4.5 million cards, which is roughly 40% of our population
in comparison with developed countries). Furthermore, we are not able to use
the services of the biggest FinTech company in the world – PayPal. And
speaking of using up-to-date payment methods, transfers with NFC System
through Android Pay and Apple Pay are yet to be dreamt of. As the term
“financial technology” seems to be the new one in the game, more
and more resources give information whether ‘FinTech’ in their nature serve
as opportunities, able to provide a modern average consumer with simple
solutions for their existing and non-ending needs or is it in fact a threat
which put their identities in danger and take them out of their comfort zone.
So, the main question is still on agenda: does the emergence of non-banking
FinTech in Azerbaijan holds more opportunities than drawbacks? With all due
respect, this question is put wrongly. It should rather be whether or not
non-banking FinTech are applicable within existing realities of Azerbaijan,
that including consumer behavior (people are more inclined to use cash
instead of credit cards, partly owing that sort of behavior to the fact that
amount of trust put in banks is gradually decreasing, and more and more people
withdraw money from their bank accounts, being afraid of losing their saving
in case banking in the country goes south), asymmetrical information (
although there currently function a handful of FinTech startups, consumers
either are not aware or misinformed, thus being unwillingly responsible for
impossibility to ensure outstanding breakthroughs in financial affairs),
inability of startups to work with big data ( sifting through vast amounts of
data help industries and separate small companies and startups better analyze
consumer behavior, understand their clients and therefore target them more
effectively, driving forward better service – our startups are cut off of
opportunities of noshing on a plethora of insights). Western block of
countries or as they are claimed – developed ones already understood the
cruciality of FinTech and the opportunities it can bring to new generation.
When it can be analyzed that venture companies and financiers hold back their
investment after IPO flop of Blue Apron Holding Inc., Snap Inc, the total
value of financing FinTech startups for 2017 is around $8 billions and some
of these financings were so huge that they created the new unicorns. Most of
FinTech companies which got the financing, specialize in data management and
data analysis. Even companies such as Bloomberg and Thomson Reuters are
investing and acquiring different FinTech startups to enrich their ecosystem
and ease the use of their products for their customers. This innovation will
create new possibilities for Azerbaijani youth. As we indicated above the
real weapon and shield in this crucial and modern world is data and access to
it. If our libraries are given access to this technology, it will grant our
youth new opportunities to improve themselves and abilities to conduct broad
and thoughtful researches. But for now, let’s give this idea a little thought
as we are progressing through to find out if the notion of incorporating
FinTech in an underdeveloped financial market such as Azerbaijan is going to
prove a solution to all existing needs and make people’s lives easy as it is
supposed to. Big data is greatly overlooked by entrepreneurs when it comes to
establishing a promising business model, from building the core value to
establishing a committed clientele. No wonder they fail to fulfill client’s
basic needs and come up with the right product at the right time. Since the
main cause for this is lack of intel, small entrepreneurship and startups
need use. In our market most of the product are created to sell, but they
should have been created according to the needs of consumers, and all these
happens because small number of entrepreneurs are not able to read and
analyze the big data. Little knowledge about big data reveals itself in the banking
too, since banks fail to analyze credibility of companies and people based on
their credit history. With help of big data, they could gain more
information, having looked through more variables that affect the consumer’s
behavior and their purchase habits. Also being able to track consumers’ past
transaction histories may have more impact on whether or not they could be
trusted a loan. Or even more. So what is it that companies can do with
implementation of data-mining? Let’s see. Whenever you make a purchase at the
shop, or have any kind of transaction, that particular business creates a
long track. This track creates a consumption pattern you unknowingly follow.
So, whenever you have a need you should immediately quench, you go shopping
and buy that particular item to fulfill that need. With proper data-mining
methods, companies can analyze your consumer behaviour even before you have
the urge to buy something new, and they can use your need against you and
approach you at the right time. So, as a matter of fact, Target has become
very successful at identifying their client’s needs and has made a fortune
through selling a right product to a right person. Analysts of Target would
find important patterns in their clientele’ transaction histories and
leverage that knowledge. For example, a few years back, it had increased its
sales by 25 % selling items to women, priorly knowing that they are pregnant
through created patterns. According to this story, businesses can predict the
future purchases of consumers and offer those items at the most important
moment of theirs, which for 80% will be accomplished as purchased item. This
case is a great example of importance of analysis and reading of big data.
And entrepreneurs can use it in different forms in order to maximize their
profit and produce demanded products. It goes without saying that
implementation of FinTech in local businesses can change a behavior of an
average Azerbaijani consumer. As our people are inclined to use cash, online
payment methods are not as popular among population. This behavioral feature
stems from the fact that, being a comparatively young country, Azerbaijan
hasn’t yet achieved a level of creating a robust banking system and ensuring
safety of populations deposits. It is still exposed to many external risks,
and the banking system of our country hasn’t proven to be effective, in light
of recent banking debacle. This is why population prefers to keep its savings
in cash, which is not so desirable for today’s world. This is why it is vital
to educate people on usage of online payment methods and shift their
behaviour towards non-cash circulation. As true as it sounds, a flow of
FinTech into a financial market may decrease the importance of banks. In the
beginning, banks may think of threats FinTech might impose on them, but as
world experience shows, banks tend to adapt to FinTech faster than an average
consumer does. So, with time, a threat turns into an opportunity. In
conclusion, although it is inconvenient to process how FinTech can make our
lives different at the moment, but we in turn need to learn from the
experience of those countries that turned FinTech into a financial market’s
accelerator, having insured the income flows of billions in and out of this
sphere. And there’s a tiny hope that all steps considered, the business
environment, as well as population will embark on new beginnings due
following this groundbreaking way to the promising future.

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