What is Fintech ?
Fintech, as it is more often known, is a term used to describe emerging technology that aims to enhance and automate the provision of financial services. At its foundation, fintech uses specialized software and algorithms that are employed on computers and, increasingly, smartphones to assist businesses, business owners, and individuals in better managing their financial operations, processes, and lives. The term "financial technology" is combined with the word "fintech."
The word "fintech" was first used to describe the technology used in the back-end systems of established financial institutions when it first appeared in the 21st century. However, since that time, there has been a change toward more consumer-focused services and, thus, a more consumer-focused definition. The term "fintech" currently refers to a variety of fields and industries, including education, retail banking, nonprofit fundraising, and investment management, to mention a few.
The creation and application of cryptocurrencies like Bitcoin is also a part of fintech. The traditional international banking sector, with its multi-trillion dollar market capitalization, continues to be where the big money is, despite the fact that that fintech sector may garner the majority of headlines.
Understanding Fintech
In general, any breakthrough in how people do business, such as the development of digital money or double-entry accounting, can be referred to as "financial technology." However, financial technology has rapidly advanced since the Internet and mobile Internet/smartphone revolutions. Fintech currently refers to a wide range of technical interventions into personal and commercial finance, as opposed to its original meaning, which described the use of computer technology applied to the back office of banks or trading organizations.
Fintech now refers to a range of financial activities that are typically performed without the help of a person, such as money transfers, checking your account balance on your smartphone, applying for credit without visiting a bank branch, raising money for a startup business, or managing your investments. One-third of customers use two or more fintech services, and these consumers are becoming more conscious of fintech as a part of their daily life, according to EY's 2017 Fintech Adoption Index.
Fintech's practise
The most well-known (and well-funded) fintech firms all have one thing in common: they aim to threaten, challenge, and ultimately unseat established traditional financial services providers by being more nimble, catering to underrepresented populations, or offering faster and/or better service.
By providing a mechanism for customers to get quick, short-term loans for purchases, for instance, Affirm aims to eliminate the role of credit card companies in the online purchasing process. Affirm claims to provide a solution for people with bad or no credit to both acquire loans and build their credit histories, despite the fact that its charges might be expensive. Similar to this, Better Mortgage uses a digital-only product that may provide users with a verified pre-approval letter within 24 hours of applying to expedite the home mortgage application process (and do away with traditional mortgage brokers). GreenSky aims to connect banks with home improvement borrowers by assisting customers in avoiding obstinate lenders and saving money on interest by providing 0% promotional periods.
Fintech and new technologies
Financial decisions will become more rational and less based on habit thanks to new technologies like machine learning/artificial intelligence (AI), predictive behavioral analytics, and data-driven marketing. The usage of "learning" apps will help users improve their natural, unconscious decisions about how much to spend and save by teaching them about their habits, which are frequently hidden from them. Using chatbots and AI interfaces to help consumers with simple tasks while also reducing human expenses, fintech is also a quick adopter of automated customer support technologies. Fintech is also used to fight fraud by using payment history data to detect transactions that are out of the ordinary. Contact Primecard today and let’s have a chat about your fintech's solutions.
Primecard’s objective is to assist our clients to take their business to the next level by utilising cutting-edge financial technologies. Contact us for more information.
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