In today’s high-tech world, wonders of technology are not surprising for anyone. The Revolution of technology is shaping the business world in almost every field like human resources, marketing, etc.
Marketers are drowning in digital marketing benefits & finance managers are embracing the technology. Smart innovations push the finance sector into a new technological era as it is a tricky subject.
In this article, we are going to discuss what exactly is FinTech and how is fintech changing the world?
FinTech – FinTech is a growing technology in business. It includes the study of financial services like:
- Streamline financial operations.
- Automating the delivery.
FinTech is growing by raising money for startups, online banking, managing investments, etc.
Along with businesses, FinTech is providing its services in other sectors too-
- Retail, etc.
These services aim to encircle the wide range of mortgage and trading activities. FinTech allows cutting down the transaction costs by separating them into individual offerings.
This allows organizations to align their business strategies according to customer expectations. Before knowing how FinTech is contributing to changing the world, let us know what exactly is FinTech.
What is FinTech?
Fintech is a combination of “financial technology”. It describes new techs that work to improve, automate and regulate the transportation of the use of financial services.
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What is the usage of Fintech?
Fintech has altered the financial sector in a variety of ways. That’s not all, though. Banks and non-bank financial institutions (NBFCs) also provide a variety of investment choices. Moreover, it can start in minutes from anywhere in the world.
Further, you can also sync your bank account to your smartphone. You can monitor it 24 hours a day, seven days a week. Furthermore, a digital wallet is now available. It allows a variety of transactions, whether little or large.
Fintech is evolving continuously and rapidly. Not only in financial sectors but also in other sectors are rising because of fintech.
Before jumping into more details about fintech let’s understand its pros.
Pros of fintech
- Fintech products and services are available for purchase and accessible digitally. This eliminates the need to go to the branch and saves time and effort. Fintech items are now easier to obtain because of the internet and its broad use.
- Fintech firms are not required to invest in physical infrastructure such as a banking branch network. This may result in a reduction in costs for clients and a better deal for them.
- Users now have access to a diverse selection of products and services. This is because access to multiple banks is limited. Because options are available digitally regardless of location.
- Fintech companies may now capture more information about users. It is all possible because of the internet and technology. As a result of the obtained data, more personalised services are delivered to clients.
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How FinTech is changing the world?
Fintech is on the run to change the world through these five innovations:
1. Predictive Analysis and Artificial Intelligence
Have you heard about Big Data? The digital world we live in produces tons of data every second, which makes organizations improve their business models. FinTech grips predictive analysis tools and AI to detect frauds & analyzes financial tendencies.
Artificial intelligence helps by apprehending the performance of financial institutions. AI also forecasts algorithms and creates certain insights. It records demand movements and also predicts the price change of a stock by continuous analysis.
This makes investors take decisions according to the statistical data or facts which helps in having high returns. Businesses are grasping these tools for so many other purposes, like –
- Customer support
Building a smart client profile also analyzes customers’ data. If there is a low-risk investor, AI will reveal-
- Low-risk financial securities
- Bonds, etc.
In simple language, it provides a more customized experience to the clients.
- Prediction for Fund Development
AI can scan investment records and can reveal future developments. AI has taken a vision altogether. By looking at the past trends it can make a judgment about interests rate and stock prices.
- Prevention from Fraud
AI can catch fraudulent payments and behaviour. It also evaluates if any individual shows the same type of pattern. Artificial Intelligence reduces the risk of losses by predicting possible frauds.
2. Blockchain Technologies
Financial regulators function in the same way even after having the availability of geeky tools. They have the authority to:
- Block transactions
- Charge access fees
- Collect personal data
There are certain key benefits of blockchain technology in trade finance which are as follows:-
Blockchain is on-trend since 2018 and has been under various banks. Moreover, it eliminates the interference of financial regulators.
Blockchain changes the old-school financial process into many democratic and clear procedures. It allows parties to exchange money. As a result, the transaction is safe and secure.
It is the most secured software in the market by having identity authentication and smart contracts.
We can transfer money with ease and convenience from any part of the world. To summarise, fintech and blockchain have the potential to shake the world’s foundations.
3. Digital Banking
Earlier, consumer trust in financial institutions revolved around physical infrastructure. As FinTech has its dominance in the Banking-sector this sentiment is changing. Providing target solutions to retail customers is facilitating a new banking postern process. Digital banking makes individual lives more convenient.
Due to Fintech, digital banking has taken a hassle-free turn. Fintech made digital banking user-friendly and pocket-friendly as well.
By innovating several applications, it is revolutionizing the way customers access their finances.
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FinTech changing the banking sector:
- Chip technology
ATM helps in minimizing financial loss. Every transaction takes place after the use of an OTP showing its top-notch security. ATM made it possible to withdraw cash at any time and any point.
Everyone uses these to pay rent, book tickets, make payments, etc. Samsung, Apple Pay, and PayPal are some main E-Wallet companies. E-wallet made it convenient to transfer cash from point A to point B by sitting on your own space.
- Mobile Banking
The rising use of smartphones is uplifting banks to make and trigger mobile apps. Clients can transfer funds, check deposits and check their accounts through these mobile apps. Now with so much ease, you can even have access to your bank statement on your phone itself.
4. Regulative Technology
Managers and entrepreneurs have to follow strict protocols in the finance world. Every company has to stick to preset accounting standards. There is a protocol for everything, whether anyone is preparing for:
- Financial statements.
- Purchasing an asset on the lease.
- Budgets, etc.
Regulative technology is one of the recent development of FinTech.
Likewise, it also makes sure of the conformity with the government and is working according to the state regulations. Not to mention, even a small mistake can land them into legal trouble and any other legal offense. It puts shareholders’ wealth at stake along with damaging the reputation.
To drop such problems every financial institution is making sure to follow the proper tech solutions.
5. RPA- Robotic Process Automation
There is no doubt that technological innovations are reducing the burden on humans. Financial Institutions apply RPA to business management solutions. RPA uses robots to complete tasks like-
- Sending emails
- Creating reports
- Organizing database
- Choosing items for the complex procedures
RPA works like an invisible automatic hand taking over financial processes like bookkeeping.
Let us talk about some of the practical applications of RPA.
- Making of financial statements.
- Draws out summaries from large documents.
- Acquires data, statistics, and numbers to keep on managing the transactions.
- Exercises and keeps track of loans.
- Keeps the flow of data entries and taping tasks.
To overtake some mundane tasks, RPA specializes in-
- Creating visual patterns
- Analyzing inefficiencies
- Detecting gaps
Because of the limit in human interference, RPA reduces the big operational costs.
FinTech is transforming financial services by utilizing digital technology. Several institutions and businesses are using FinTech software for effective growth. Renowned software like PayPal, Stripe, Kickstarter, Payomatix etc.
Financial institutions already incorporating FinTech to serve their customers. Thus, it is the right time to polish the skills, expertise, and knowledge. Thus to grow further and keep up with the rising FinTech industry.
Since fintech is rising, so to keep yourself up-to-date, Payomatix offers you an all-in-one platform. On Payomatix you can have access to multiple payment gateways with a single API integration. To grow and know more, sign up right away with just a click.