The Importance of Innovative Fintech in Smart Cities
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According to statistics from the UN, 55% of the world’s population lives within an urban environment. This is expected to spike to 68% by 2050 and most of these metropolitan residents will be under the age of 29.
It’s no secret that today’s population, youth or otherwise, live fast-paced, digital lives with a sense of urgency about their day-to-day, which is only expected to heighten in time.
The only way to tackle modern-day challenges such as ageing infrastructures and to keep up with the expected trajectory of our hurried digital lives is to develop these urban territories into Smart Cities.
What is a Smart City?
Smart Cities were once a hot topic in the media, but despite the need for them becoming more prevalent, the media buzz and conversation has died down.
A Smart City utilises the latest innovations in IT and technology to enhance the efficiency and performance of modern metropolises, and improve the ease and quality of life for the inhabitants of the city.
The focus is on combatting the obstacles or downfalls that exist in modern society and urban environments as we know them. This includes using technological advances to better transportation, energy, utilities, waste management, resource consumption, public services, overall costs and much more.
The cost of implementing and enabling Smart Cities is expected to almost double within a four-year window. The International Data Corporation estimated Smart City costs in 2018 at US$81 billion, and this is set to drastically rise to US$158 billion by 2022.
What is the Vital Role of Fintech in Smart Cities?
Some of the best Fintech innovations were purposely designed to simplify procedures that have become unnecessarily complex over time - such as banking - or services that no longer satisfy consumer demands or needs; online shopping and international money transfers, for example.
Fintech start-ups always have the same end goal in mind. That is to provide consumers with a product or service that allows them to achieve the same outcome, but in less time, with fewer steps, for cheaper and with more transparency than previous solutions.
Whilst there are many benefits of Fintech in a Smart City, two standouts are quicker and simpler payments make for happier residents, and better international transfers and banking broadens the city’s access to a global market.
How Some Cities are Using Fintech
London
The most glaringly obvious entry route into Fintech for the city of London is with their transport systems.
Transport for London (TFL) had a full digital shift across all transport systems in July 2014, and the organisation has been a cashless operation ever since. Since the switch to contactless payments only, TFL has become more efficient with far fewer delays, cheaper journeys and made the process of boarding much faster for passengers.
Singapore
Fintech is central to Singapore’s ambitions to become a Smart Nation with a “Smart Financial Centre” at its heart. Part of the country’s continued efforts to achieve a Smart Financial Centre includes using innovative technology to create new opportunities, increase efficiency and better manage the country’s financial risks. Singapore also strives to eventually become a cashless nation.
Estonia
Estonia is possibly the most forward-thinking in their approach to becoming a Smart City thus far. They have abandoned traditional methods of identification and they now offer government-supported digital identities. The E-Estonia movement has been linked to many of the country’s financial institutions and companies to provide easy and convenient banking services to residents.
While we still might be some years away from our first fully Smart City, many are definitely making waves and on the right path to becoming truly smart.
A common thread between each advanced city that is leading the way for others is their use of Fintech. Incorporating innovative Fintech is a must in order to become a Smart City, it enables easy international business, makes daily life more convenient for residents and encourages the efficient, economical and eco-friendly operation of a nation.
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