The popularity of financial technologies is on the rise, with more and more organizations exploring new ways to leverage innovation and unleash business growth and overall development.
After getting huge success in the traditional financial landscape, the fintech industry started making waves in multiple areas, especially in those that, at first glance, had nothing in common with financial technologies.
And even though fintech and sports may sound like an odd partnership, the two industries have much more to offer than it seems. Whether it is smart contracts, new payment methods, or the launch of fan tokens, fintech is actually a key to the door that hides endless opportunities for the world of sports.
What sports can take from fintechs for new business opportunities
The pandemic became a significant challenge to the sports industry, which resulted in postponed or canceled competitions, terminated contracts, and the fading interest from the community.
On the other hand, Covid-19 has given a tremendous push to digitalization and the development of online products, which after easing restrictive measures, enabled sports and financial technologies to intersect and shake the world with a variety of options that this world has never seen before.
Blockchain technologies
One of the most promising developments has become the creation of blockchains that already proved to be fertile ground to design outstanding solutions for financial space. However, the potential for sports is no less significant, considering the fact that lots of countries have unhindered access to the ecosystem, a genuine interest in sports, and young users, who are fast to adopt new technologies.
For health and performance
First of all, blockchain can be used to aid and benefit more traditional sports. Lots of famous sports teams now use such technology on a daily basis so that they can track their condition, heart rate, diet, and overall performance. Such insights are then transferred to the coaches to understand how an athlete’s performance can be improved. From many sides, such records are very sensitive, but by using blockchain technology, the data can be securely stored, accessed, and transferred.
For resolving doping issues
Doping scandals are a huge issue in the sports world that can seriously affect an athlete’s career. In February 2022, during the Beijing Olympics, a Russian figure skater Kamila Valieva tested positive for a banned heart medication. The problem was that the probe had been taken in December 2021, but the results only came after the team event had concluded. WADA tried to make excuses for the delayed results, but the stress imposed on a 15-year-old girl ultimately left her without an individual medal.
Blockchain technology can again be utilized to better handle and transfer data regarding test results and the medical supplies athletes use. Furthermore, timely reports and access to a suspected athlete’s accurate and reliable medical records guaranteed by blockchain are vital to avoid unjustified accusations that can ruin the career right during the competition.
Smart contracts
Smart contracts are perhaps the most obvious way to be applied in sports. They are self-executing and require no supervision, as their terms are literally a code written into a blockchain. When conditions of the agreement are met, the contract can automatically release payment and record all data, which, in turn, guarantees complete trust and transparency to all parties involved in the operation.
NFTs
Another outstanding ability of blockchain is NFT. Being a fantastic source of income for athletes and the community, it’s no surprise that NFTs have already hit the world of sports. Interestingly, when Alexander Ovechkin, Khabib Nurmagomedov, and Alexandra Trusova released their NFT collections, it was a huge success, which allowed them to earn thousands of dollars. Moreover, with the current price of $22 billion, the NFT market is expected to reach $80 billion in three years, and that speaks volumes.
Security and transparency
One of the most productive ways for fintech-sports partnership is eSports. Though eSports is a relatively new sector, it has already managed to gain worldwide popularity, and its community is replenished with millions of new members every year. Nevertheless, the industry still abounds in some hot issues that impede its further growth. The first challenge is security concerns related to financial transactions, including entrance fees and reward payments.
Several years ago it was reported that a greater part of people playing eSports, were young adults of 18-24. Needless to say, they are often not completely aware of the issues online gaming brings with it. When it comes to online sports, there are many risks involved, including privacy, safety, and financial risks. And even though many frauds are still attempting to attack the sports industry, the advancements of financial technologies significantly hinder malicious activity. The accounts are more secure and protected now, and hacking an account can become an uphill task.
New payment options
Before fintech started collaborating with sports, online games were entirely dependent on standard payment methods, bank accounts, and credit cards. Besides, end users had to leave their personal details on a gaming platform, which could lead to data loss or various fraudulent activities. With the introduction and development of payment services like Amazon Pay, G-Pay, and others, fintechs have made it easier to complete fast and secure transactions associated with eSports, protect data and create convenient online wallets linked to bank accounts.
Conclusion
The overall partnership of fintech and the sports world promises a lot of fantastic opportunities. With the new and upcoming technologies, once suppressed by the pandemic, sports now can rise to the next level.
Blockchain technology, smart contracts, NFTs, next-gen payment methods, customized financial experience now revolutionize the industry, set trends, and identify how we interact with our favorite athletes. The result of this incredible integration lies in a much more engaging, convenient, and financially secure environment with a huge potential for sports to grow and thrive.