For decades now, technology has been the tether that has brought the financial market together, be it the Stock Market, the Banks, Insurance companies, or Startups, enabling our day-to-day transactions. The use of technology for finance isn’t new. What makes it novel is its widespread use in our everyday lives and the awareness it brings.
The term Fintech refers to the use of technology in financial services and is an abbreviation of financial technology. Innovations in financial services and products are incorporated into architecture and delivery methodologies.The fintech industry uses portable advances, vast informational data, and analytics to tailor products to consumers and businesses alike. The fintech industry is growing and encompasses various business sections, including loans, advisory, investments, and payments.
In the realm of finance, fintech has embedded technology at the core of the business, transforming how organizations deal with their customers. As a result of the tremendous rise of Fintech institutions, the community has experienced a number of benefits: severe competition, lower costs for consumers, and easier access to financial services for underserved populations. This is just the beginning.
Often, people assume that it’s all about the creative, innovative new companies – with their client-centric, modular first applications – who are trying to disrupt the traditional financial system. Though the Fintech industry commonly conjures up images of startups and technology, conventional organizations, banks, and government agencies are also consistently relying on fintech services for their motives. Although this industry has the potential to disrupt and enhance, simultaneously, different segments are being affected and improved by the Fintech industry.
Due to the increasing number of fintech firms and banks in the financial market, it has led to intense competition. This is because banks have the advantage of having more robust networks and impeccable regulatory compliance. The rise of fintech services such as peer-to-peer networks and blockchain technology is undermining the conventional banks by slashing costs and improving efficiency. The current structure is not designed to accommodate the various working models of fintech. It has to be redesigned to accommodate the various needs of the different types of financial services suppliers.
Our financial system and framework can be enhanced in countless ways with fintech. These trends include the rise of robot consultants for the stock market, the use of blockchain technology for money laundering prevention, the decentralization of worldwide payment systems, and the implementation of elective credit reporting.