Fintech is a combination of the words “financial” and “technology” and is a relatively new, and often vague, term. It enables consumers or financial institutions to access financial services in new, faster ways than has traditionally been available. Helps in providing financial services. Think of the difference between going to a bank to request your balance. And being able to get that information in real-time on your phone. By this, you’ll have a good idea of ​​the impact of fintech.

Everything from the ability for consumers to go online and view their financial transactions, through apps are all part of the evolution of financial services. They allow you to pay friends, to allow financial institutions to make quick loan decisions. Investors can do their own research, pick stocks and watch their portfolio perform in real-time, which is also an example of fintech at work.

Fintech strengthens consumers to take charge of their financial lives, leading to greater financial literacy than ever before. Moreover, it is breaking down old silos and leveraging advanced technology to help consumers advance their financial health and outcomes.

Examples of Fintech

Some examples of fintech companies are Personal Capital, Lending Club, Kabbage, and Wealthfront. They have emerged over the past decade, providing new twists and allowing consumers greater influence over their financial outcomes.

Digital Lending and Credit

Fintech giant Cabbage funds small business loans directly and is powered by transactional data to help make incredibly quick loan decisions. Tapping into peer-to-peer lending. Lending Club lets users lend each other money (P2P lending) for business ventures without the involvement of a traditional financial institution. Each of these innovations has been made possible through the use of Big Data and advanced analytics on digital platforms.

Credit Karma is one example of a fintech in the growing field of credit reporting. It provides a service (free credit reports) in exchange for the ability to advertise loans and credit cards tailored to the specific needs of its customers.

Mobile Banking

With a greater focus on consumers’ financial well-being, many financial institutions are adopting or expanding their mobile banking capabilities. They keep up with the growing demand for digital banking among consumers. However, most banks now offer some sort of mobile banking capability on their platforms.

Mobile Payment

Ask anyone under the age of 30 how they prefer to pay and they’ll likely tell you that mobile apps are the way to go. As we have moved from a cash-based society to an increasingly digital one, peer-to-peer services such as Venmo have arisen to replace traditional payment methods. In fact, it is estimated that in 2018 alone, mobile point-of-sale transactions will exceed $5.4 billion over the world.

Cryptocurrency and Blockchain

Cryptocurrency exchanges are able to connect users to buy or sell cryptocurrencies such as bitcoin. The blockchain solution aims to reduce fraud by keeping provenance data on the blockchain.

Insurance

Insurtech is the use of technology designed to maximize savings and gain efficiency from insurance industry models. InsureTech is redefining the insurance customer experience by innovating on long processes including underwriting, claim processing, and instant activation. Also, Fintech companies are starting to partner with traditional insurance companies to automate processes and enable insurance companies to expand coverage.

Business

The adoption of Fintech has improved trade and investment. Without the use of AI technologies information from big data is often unstructured and unreadable. Using natural language processing, these technologies can sift through complex datasets and extract insights from the data in seconds. Now, traders can now run massive amounts of data through algorithms and identify trends and risks.

Banking as a Service (BaaS)

Through banking-as-a-service or white-label banking, fintech is able to offer the products and services of a financial institution under its own brand. FinTech pays a fee to the financial institution to access its BaaS platform, banking license, regulatory expertise, and services related to lending, payments, mobile bank accounts, debit cards, fraud management, and more.

Importance of the Fintech Industry

The growth of fintech is due in large part to the opportunity for smaller players to compete in the same arena as traditional banks and financial institutions. Thanks to fintech, it is no longer about who is the biggest, but who is the fastest and most responsive to address ever-changing consumer demands effectively. . Instead, they offer targeted – often niche – services that target a particular audience.

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