Fintech is the automated process of digitizing and streamlining financial transactions, or services, usually through the use of mobile devices.
What Is Fintech?
In order to understand what fintech is, you must first understand the meaning of financial technology. Banking and Financial Solutions Technology, also known as fintech, is a term used to describe any innovative technological developments in the financial services sector. In other words, it’s a way of describing new technologies that are being used to improve or automate traditional financial methods in areas such as banking and investing. Simply put, any cutting-edge financial service that uses new technologies falls into this category.
The Rise of Fintech
Today, fintech has become a buzzword for anything related to emerging tech trends for finance and business. This includes everything from blockchain and bitcoin to artificial intelligence (AI) and machine learning (ML). When it comes to investing, robo-advisors are also considered a part of this trend. These automated investing platforms are expected to manage $4 trillion by 2020.
What Is Fintech Used For?
Fintech is used in almost every area within the financial industry, from mobile banking to online payments and investing apps.
The future of traditional banks
The term “fintech” is everywhere in the financial services industry. It has been a buzzword for more than five years, and it is not losing any momentum.
Some consider it a trendy word that will fade with time, but I think fintech is here to stay. The future of traditional banks is intertwined with fintech. In fact, fintech is part of the future of banking itself.
The essence of fintech isn’t new technology or innovative products; it’s about challenging the way we do things now. It’s about using technology to disrupt old methods and replace them with better ones — to make things easier for our customers. Digital transformation is at the heart of fintech.
Faster Transactions
Traditional payment methods like wire transfers and checks can take several days to process. The time it takes for a transaction to occur is particularly important in the financial world. As the saying goes, “time is money.” With a fintech app, you can make transactions at any time of day on any day of the year with just a few taps or clicks. You don’t have to worry about waiting for banks to open before sending money or having to stand in line at an ATM to withdraw cash.
Improved Accessibility
The accessibility of fintech apps also makes them a great choice for consumers and businesses alike. Mobile devices are fast outpacing desktop computers and laptops when it comes to internet access; in fact, mobile internet users now account for more than half of all internet users worldwide. Fintech apps provide users with quick and easy access, which makes them especially convenient if you need to make a quick transaction or check your account balance while on the go.
Customer Satisfaction
Fintech companies know that customer satisfaction is crucial for success in today’s business landscape. Rather than focusing solely on products, many fintech companies place equal emphasis on customer service and satisfaction as well. One way they do
Banking and Financial Solutions
The FinTech sector has been in the limelight for quite a while now, as traditional banks and financial solutions companies have started to feel the heat of the competition.
In fact, a recent report by Bain & Company revealed that 90% of chief executives from large banks feel threatened by FinTech companies. So much so that most banks are making major investments in order to stay competitive.
Also Read: Top 7 Fintech Trends Reshaping the Digital Payment Ecosystem
Fraud & Identity Theft Mitigation
There are now tens of billions of digital identities. We’re all interconnected in a global network of data and engagement. And while it’s undeniable that our digital connections have revolutionized how we do business, they’ve also created opportunities for fraud and identity theft – a new risk to individuals and organizations alike.
To help you meet the challenge, Experian is committed to delivering innovative solutions that give you the power to proactively detect fraudulent activity and help protect your consumers from identity theft across multiple channels – including mobile and online.
When a new customer applies for credit or a bank account, they must complete a Know Your Customer (KYC) process. This process involves identity verification and credit checks, which is where fraud prevention services are critical to the success of your business.
As part of the KYC process, it’s important to be able to confirm the applicant’s identity has not been stolen. A Social Security number can be used by fraudsters to open accounts in someone else’s name, potentially causing havoc for the individual as well as the lender. It is also important to confirm that an applicant has not made an intentional misrepresentation on their application. The most common misrepresentation occurs when consumers attempt to obtain credit in another person’s name without their knowledge or consent.
Fintech and Blockchain
Fintech became popular in the 2010s, as established financial institutions begin using mobile and internet technology to improve the user experience of their products and services.
Banks, insurers and other financial service providers have been investing heavily in fintech, both to compete with startups that are trying to replace them and to deliver better products and services to customers.
Blockchain is a technology that allows for the secure transfer of assets without the need for a central authority. It’s best known as the system that underlies bitcoin and other cryptocurrencies, but it has many other functions.
Blockchain projects aim to make transactions faster, more secure, cheaper and less reliant on third parties. This includes everything from cross-border payments, lending and credit scoring through to digital identity and paperwork automation.
Blockchain technology is expected to save banks up to $20 billion a year by 2022 by cutting out intermediaries across several different areas of banking.
Fintech will change the way we bank in the future.
It’s clear that Fintech will change the way we bank in the future. It is also clear that regulation and compliance are a key concerns for many players in this space, and this is where our expertise lies.
Fintech is transforming finance, banking and payments. And it’s not just banks and financial services companies that are being disrupted. Fintech innovation is moving into many industries as a result of the emergence of digital currencies, artificial intelligence and blockchain.
Fintech also has the potential to bring financial services to millions of people who don’t currently have access to such services, including emerging market populations and those living in poverty, according to the World Economic Forum.
From processing payments to making loans, here’s how fintech is changing banking now and in the future.
