The alternative finance revolution continues to turn the finance industry upside down for everyone, including students. With America’s student debt total topping $1.48 trillion and a growing mistrust of the traditional banking system, students are turning to alternative finance and driving the upward trend for digitalized banking. Countries such as India are leading the change, receiving over £200 million in fintech funding in the first half of 2017. Technology is integrating itself into every part of university life from the learning and studying habits of students to the student loan application process and their daily banking transactions. Here are just few ways in which the face of student finance is transforming.
The FinTech industry is rapidly developing globally with over 400 FinTech firms in India. In Asia, Fintech investments increased 12.5 percent to $5.4 billion in 2016, driven mainly by growth in India and China. Startups including financial technology companies have identified this issue and are rapidly making a name in providing low cost loans to students seeking to fund their education. Their benefits is not confined to borrowing either. Companies are also providing platforms to improve student financial literacy and knowledge of their student loan refinancing and consolidation options. Platforms allowing students to compare financial products have improved the transparency of the student finance process.
One in five students admits to using their student loans to invest into cryptocurrency, according to a study done by financial website The Student Report. With the value of cryptocurrency skyrocketing-from $13 per bitcoin in 2013 to $1,182 in 2017, students are mining the digital currency from their dorm rooms, as they try to get in on the meteoric rise of digital currency at the moment. In India, Many are using education loans dedicated for their living expenses to invest, as a way of reducing the cost of borrowing and repaying their loans. Others have discovered the acceptability of cryptocurrency for international transactions where credit cards are not accepted.
App & Mobile Based Banking
This is the mobile age. From the food industry to banking, consumers, and especially the younger generation, are flocking to mobile and app based services such as the popular BankBazaar. Banking is transforming, with companies such as Finpay allowing digital payments to those without a digital wallet or card. By using their mobile number and Aadhaar ID, students can now make school payments or do their banking with a swipe of their finger. Similar apps like S2Pay now cater to the millions of Indian students that are not privy to internet connectivity, allowing digital payments to be made using a four-digit PIN. Finally, in 2018, messaging apps such as Whatsapp have rolled out Unified Payment Interfaces, allowing students the ability to do mobile to mobile payments.
As the younger generation comes of age, the face of the financial industry and financial transactions as we know it, is transforming. Even as Governments push for a cashless economy, students are leading the evolution of student loans and banking in India and globally. The trend of going digital and mobile is stronger than ever. Based on the boom in investments and demand, it is not expected to slow down anytime soon.