Fintech is not a new industry. It is the industry that has evolved very quickly. Technology has always been part of the financial world. Whether it is the introduction of credit cards or the ATMs.
Think of the difference between walking into a bank to check your account balance and the ability to get that same balance checking option in real-time on your phone.
So, let’s understand about Fintech
What is Fintech?
Fintech is an amalgamation of the terms “finance” and “technology”. It refers to any business that uses technology to enhance and automate financial services and processes.
Fintech is a rapidly growing industry that serving both consumers and businesses. From mobile banking to insurance to cryptocurrency and investment apps.
Fintech is empowering consumers of their financial lives, leading to much greater financial literacy than ever before. It is helping to advance the consumers’ financial condition and outcomes by using advanced technology.
Although it seems simple term ‘Fintech’. But it covering a vast number of services that are changing finance industry in the new digital era.
Let’s see how Fintech is changing the finance industry:
Have you ever used ApplePay or Samsung Pay? Or used a service like Google Pay or Paytm to send money to a friend? These are mobile payments applications.
The mobile payments industry has been looked upon as the new big thing, especially inside the Fintech space. It’s a trend that reaches billions of people and has the opportunity to truly capture the unbanked population. It can even be the end of the traditional wallet, we’re all so used to.
Budgeting and tracking your expenses using a spreadsheet or pen and paper is a thing of the past. Now Digital banks have to change the banking industry completely. Digital banks changing our expectations of traditional banks. Everything you need is an app on your smartphone and do! Everything in one stop!
Insurtech (Insurance Technology) has completely changed the way consumers purchase insurance and pay a premium. Insurance premiums are also calculated automatically.
A cryptocurrency is a virtual currency that is Secured by Cryptography. Blockchain technology is the backbone Cryptocurrencies. For that, it gains decentralization, transparency, and immutability. By this user able to transact with one another directly at any time and from anywhere. They also can do so autonomously, without the intervention of the central bank.
Crowdfunding is the use of small amounts of capital from a large number of individuals from across the world to finance a new business. It provides vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together. Investors can select from hundreds of projects and investment can be small. Crowdfunding sites generate revenue from a percentage of all the funds raised.
Alternative Credit System:
Alternative credit scoring system goes beyond the traditional parameters employed by agencies like CIBIL. The biggest beneficiaries of alternate credit scoring are consumers who have no financial or credit history. For such new consumers, there is no sufficient centralized data available. But that doesn’t mean that they cannot avail of credit. Alternate credit scoring companies use other tangible factors like a digital footprint is a set of data a person creates while using the Internet. It includes the websites a person visits, emails sent, and information submitted to online services. to determine the credit-worthiness of a new customer.
Regulatory technology (RegTech) is used to refer to any and all technology designed to help financial services companies maintain regulatory compliance. Most solutions are focused on maintaining compliance with know your customer (KYC) and anti-money laundering (AML) regulations.
Small Ticket Loans:
Small ticket loans are a small amount of loan like Rs.5000. This can be a huge relief to first-time borrowers who seek such loans for any financial emergency or day-to-day needs. Digital lenders should make short-term, small personal loans easily accessible to everyone. Uniqueness is their 100% digital approach to facilitating instant small-ticket loans.
Additionally, one of the most popular and big innovations in fintech is the development of stock-trading apps. When prior investors had to go directly to a stock exchange. But now, investors can buy and sell stocks at the tap of a finger on their mobile device.
Future of Fintech
FinTech growing all over the world at lightning speed. We have just seen the trailer of the FinTech. But the entire film will definitely release in upcoming years. It is literally changing our lives and habits by making it easy to trade, bank, and exchange money without the need for physical human interaction.
However, FinTech truly overtakes the market especially in the regulatory and data protection space, to win consumer trust. Big data, Blockchain, AI and so many other technologies advance already in use. Business leaders are now focused on new technologies because Fintech is one of the fastest-growing industries.