Technology has had an enormous impact on the way people live their lives. It’s no longer unusual to see someone walking down the street talking on his mobile phone or playing video games on his tablet.
But one area where technology has had a particularly profound effect is finance.
Thanks to FinTech we no longer need to go to banks to get hold of our money. We can do so through mobile phones, online banking portals, ATM machines, debit cards, credit cards, net banking, and also through third-party payment gateways.
These days, we don’t need any physical presence to access our accounts. In addition, we can also make payments to others through mobile wallets, e-wallets, and digital currencies.
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Table of Contents
- How has FinTech revolutionized the world we know today?
- FinTech and Personal Finance
- FinTech and Lending
- FinTech for B2B
- How the World is Adapting to and Embracing FinTech
- The Future of FinTech
The term “FinTech” has come to mean online finance, including everything from virtual bank accounts to cryptocurrencies.
FinTech applications promise better access to financial services and products for their users. They also prioritize user experience by enhancing its functionality and customizing it according to individual needs.
Traditional financial institutions that rely heavily on manual processes and paper records can be slow and cumbersome to operate. They also often take months to approve applications. These days, however, FinTech companies offer fast, efficient, and secure ways to transfer funds. Since they utilize technology, these firms can scale quickly and efficiently.
These factors have all played a role in the recent gallop of FinTech and helped to democratize financial services for a huge number of people — both individuals and companies.
As millions of people use FinTech services to manage their finances, track spending, and save money, they’re also helping bring investment and financial services into the mainstream. Innovative FinTech products are also bringing investment and asset tracking into the mainstream.
Previously restricted to investors with a large investment portfolio and the means to hire professional financial advisers, these tools are now accessible to anyone who wants them.
New financial services companies have emerged recently, enabling individuals to invest using cryptocurrency. These include Robo advisors.
Most traditional loan providers don’t have access to enough data to assess the creditworthiness of most individuals. As a result, most of them either deem a large percentage of people ineligible for loans or charge extremely high-interest rates that are not sustainable for most consumers.
Financial technology (FinTech) uses technology to improve financial services for consumers and small business owners by providing better products and lower costs.
Businesses using FinTech apps are able to improve their operations by automating manual tasks and reducing costs.
Technology has automated the process of evaluating risks across multiple financial markets, which reduces the chance of losing large sums of money due to human errors.
Lenders are often hesitant to lend money to small companies with little or no track record. Smaller companies are also reluctant to borrow from lenders because they fear the high costs and long application processes.
With FinTech companies such as Credibility, small and medium enterprises (SMEs) can access loans at lower interest rates and with greater transparency during application. Furthermore, FinTech removes the pressure of limited working capital, enabling SMEs to grow faster, earn higher profit margins, and increase their cash flow.
More and more people are using digital bank accounts for things like contactless payments, peer-to-peer (P2P) fund transfers, and international transfers. And they’re asking their banks for these services.
Easier, lower friction digital KYC (Know Your Customer) procedures. Many Indian bank APIs (Application Programming Interfaces) now enable non-financial companies to use “embedded finance” to offer financial products to their customers. FinTech allows these companies to integrate these new products into their existing customer journey.
Millions of users are now using blockchain-powered smart contract applications that speed up transactions and reduce transaction fees. These applications also help ensure data security by ensuring that no one can tamper with the records.
With the growing popularity of digital signing, financial technology companies are helping eliminate the need for paper-based signature forms.
In the future, new technologies will make traditional banks obsolete. New companies will emerge to offer better customer experiences. These innovations will include video and chat-based interfaces, artificial intelligence-powered personal assistants, Robo-advisors, and online payment systems. Blockchain technology will continue to grow in popularity and usage and will enable new ways of doing business.
Smart financial institutions will realize that rather than compete with FinTech companies, they’re better off partnering with them by offering customized solutions using open bank accounts and other technology. The smartest financial institutions will partner with FinTechs like Credibility and use their platforms to offer customized solutions to clients.
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