What is Fintech?

Companies on a regular basis use technology to drive their business in a swift, secure and safe way. Traditionally, everything was done physically or by some sort of means that would take time but now with the advancement of the internet and fintech – or else financial technology has totally changed people’s way of dealing with various acts of money in their daily life. It has and also now affected their way of sending money, paying various bills, investing somewhere, and buying or sell products.

Fintech startups now try and offer services to different financial institutes and also show their innovative part which was previously done by banks and different financial institutions. Have you thought about the difference of all the way walking to any bank for any kind of information you require that would be readily available on your smartphone by just a swipe of your surfing browser? This will explain to you the impact of fintech.

Fintech has already started giving people their right of driving up in their business by the use of technologies empowering them and control their financial status. It lets small players to compete on the same platform where the other financial institutions speed up. Now with fintech, it has become easy to know that being faster and secure is much more important than being a big bull. Let’s look at some prime benefits of fintech.

Benefits

Long Term Service

Fintech always helps and allows companies to expand their reach in services to customers using innovative technology. Usage of smartphones has increased the number of services used by people.

Convenience

Managing financial options via tablets, mobile phones gives an all-around performance, a unique way of enhancing business structure to the customers. Mobile connectivity helps in improved convenience of financial transactions.

Upgraded Security

Customers demand high security in financial transactions. This is the reason why fintech has always stepped in and have shown a perfect way of digitalization as well as controlled measure of security that would make the customers confident of their dealings.

Swift Approval Rate

Fintech has made it possible for lenders and borrowers to deal in a day with the help of technology. Artificial intelligence and automation have made it easy for anyone to connect within seconds.

Fintech Examples

• API’s – Bolstering this option as a viable concept, API’s have changed the way we look at banks. Financial data APIs have various tools that can be leveraged to provide merit to ways including connection of a business.
• Payments – Being the largest subcategory, this aspect has improved the ease in making swift and secure financial transactions by the customers in their businesses.
• Banking – Mobile banking sector has emerged as a boon to various businesses. It has helped the unbanked section in dealing online without any hesitation.
• Smart contracts – A smart contract utilizes the blockchain and that in return authenticates as well as keeps an eye and later enforces the period of contracts automatically. This also eliminates the requirement of legacy technologies.
• Lending – With the help of the lending framework, now these aspects of fintech have helped a lot of consumers and businesses borrow like never before. The advanced loan software has automated traditional lending methods by reducing unnecessary time used.

Future of Fintech

Ongoing period with technology has already created a boom in every sector but coming years would also be a dream run period for unbanked people with the help of fintech.

Artificial intelligence, analytics, investment management, will create a swift move in this sector due to advancements in technology.

Fintech has already taken financial processes to an altogether different level and has made it totally customer-friendly.

They help customers and importantly unbanked people run their businesses in a secured, swift and smooth manner.

Technology in any sector could create a blast in upgrading aspect that would lead to a perfect streamline of upward events. In today’s era of digitalization, everyone depends on technical equipment’s and systems that can enhance their business in some or the other way. Traditional banking methods are now on the closing track due to the entrance of Fintech. The emerging competition from various startups that use Fintech to create extraordinary customer service experiences in banking and financial sector services has forced the big banks to revert back by innovating themselves.

Fintech

Financial services that are given to the customers using technological aspects such as mobile payments, borrowing and lending etc. is known as fintech. There are various examples that helps us get information about Fintech.

For example, to track mortgage loans, deposited funds, balance enquiries, and checking deposits are mainly counted in fintech services. Fintech services are always in reach with modern age people as well as a network for old age individuals. It is a technology that automates and improves the destined delivery with clear efficiency of financial services.

Technology in any sense can be useful to us wherever and whenever it has been used in an appropriate manner. It has already moved to some of the consumer-based services and is also used now in various sectors such as investment management, retail banking management, etc. Some of the prime functions of fintech are money transfers, investment management, credit applying process. The development of cryptocurrencies has been an additional component of fintech.

Banks

These financial institutions are given licenses to accept deposits from their customers and make loans. Banks have various incorporated types such as investment banks, small banks, retails banks, and much more. All these banks are regulated by the central government i.e., the national government. Here, customers can do various transactions on their routine track such as depositing money, withdrawing, bill payments, etc. Wealth management and safe deposit boxes are also some of the banking aspects.

It provides the liquidity needed for families and businesses to invest in the future. Often these banks will offer a higher interest rate to depositors as they raise money to lend for mortgages. Banks are in need of updating or upgrading their own systems to give enhancement to their customers’ needs. Banks as well as traditional finance-related service providers need to be far better in responding to technically well-planned data structure of innovative initiatives.

Dissimilarities between Fintech and Banks

• Technological dependence – In today’s world, everyone including fintech companies heavily depends on technologies to work on and banks on the other end do not rely heavily on technical enhancements.
• Structure – Banks have a complex and rigid organizational structure that would itself sometimes become a barrier to innovational changes. Whereas, fintech companies have very few restrictions in structural format and are readily available for any innovational change.
• Objective – Fintech largely focuses on advanced accessibility, functionality, personalization that would help their customers to experience it in a unique manner. Meanwhile, banks mainly focus on the security as well as management of financial setbacks.
• Target audience – Banks have always targeted people who have better and proven track records, best credibility, and tough credit ratings. But, fintech helps the ones who are unbanked and has low credit ratings.
• Market distribution – Smartphones have played a major role in the advancements of technology trends but banks, on the other hand, have very limited market distribution.
• Technological perspective – Artificial intelligence, machine learning, automation are some key factors fintech relies on, but on the other hand, banks are still lagging behind with their traditional working systems.

Fintech has wide-open opportunities. Here, bankers need to search for an option that will help satisfy their customers. Both have some positives ends to watch upon but being in an official position, they have the advantage to look at how fintech companies are moving upwards with technological help and then approach in a way they need and get their customers satisfied.