The term Fintech has become a widely used abbreviation for financial technology in the past few years. It has dominated the global financial ecosystem yet not everyone understands its true meaning and how it works. Fintech companies utilize the latest technology to automate and improve the flow of financial services across networks. Fintech is, however, not a new invention as it has been a part of the banking sector for quite some time now. Examples of technological inclusion in banking services are credit cards, ATMs, e-trading, and many other financial services.
When the term Fintech entered the market, it was used as a back-end technology system by traditional financial institutes. With the passage of time its scope broadened and started covering sectors like finance education, retail banking, insurance, investment, and non-profit organizations.
Conventional finance companies must closely examine the demands of the consumers and the competition posed by new entrants in the market. With technological advances, Fintech has taken the financial industry to a whole new level.
Fintech utilizes machine learning algorithms, blockchain management systems, and data science to accomplish various processes. Another regulatory technology has surfaced recently known as Regtech, helping Fintech businesses to navigate compliance and regulatory challenges in the finance ecosystem.
Fintech can be seen as a positive paradigm shift for the financial sector. Fintech promises a future with easily accessible financial products and services which also user-friendly and efficient. This is why the majority of financial institutions are turning towards Fintech firms to adopt the latest Fintech strategies.
Fintech enables companies to expand their financial services to the previously unexposed market. Other companies adopt this technology to improve their services and ensure real-time communication with customers. Then there are companies that utilize Fintech services to develop products that provide value to the end-users.
Cyber-security issues are often associated with the growing Fintech industry. The global expansion of the Fintech ecosystem has also led to the rise of cyber-attacks and weak infrastructure. The constantly evolving Fintech industry is working towards eliminating new threats while countering existing fraud risks at the same time.
There are various applications of Fintech such as crowd-funding, crypto-currency, block-chain, Robo-advising, and stock-trading apps to name a few. All new start-ups adopted these latest Fintech applications to give tough competition to the traditional banking systems. As a result, it has become more important for the latter to transform their conventional systems into technologically advanced systems.
The fintech industry has been growing tremendously worldwide with a value of US$ 127.66 Billion in 2018. With the growing adoption rate by all small and big players in the finance sector, the value of Fintech is going to increase like never before. Visit www.finextcon.com and delve deeper into the world of Fintech.