FinTech is a most popular term nowadays. It is the technology which aims to compete with traditional financial institutions in a sense of conducting business by applying the new business models and methods of performing financial activities. Here we will discuss the benefits of FinTech and how it will affect our lives in the future.
Fintech is the new emerging technology which is the combination of technology and finance, means design and deliver more efficient and secure financial services and products using innovative technologies like Artificial Intelligence, Internet of Things, Blockchain, Big Data and Machine Learning etc. In short, FinTech means to include technology into finance to make technological financial services which are more effective, efficient and fast than traditional ones.
MAJOR BENEFITS OF FINTECH
- FinTech has raised the competition in the financial industry, as it is growing rapidly by every passing year and it has already disrupted several traditional entities like banks, insurance, investments corporations, which then results in these traditional corporations reconsidering the way they conduct business and perform financial activities and they have started thinking of improving or changing their business models, which obviously in one way or another better for their customers
- Mobile technology has been the major key technology which has made the term FinTech common, as there are now several financial services in a sense of mobile-based apps we can use through our smartphones to perform all kinds of things that we doing traditional financial entities such as banks. For example, Alipay or WeChat are used for online payments, and services like Kickstarter used for crowdfunding
- The biggest benefit of using FinTech is that it removes the barriers and lowers the costs for customers, as FinTech removes the need for intermediaries that charge high fees, which is then very costly for the customers
- As compared to traditional services which take days or months to process, FinTech or financial services take minutes to perform operations such as payments, transferring money etc
- The major revolutionary change the FinTech has brought into financial industry is that it has connected the people with finance who don’t have access to traditional banking or they just don’t want to use it, and now being a part of FinTech they can also transfer money or pay their bills online
- The reason that FinTech has become much popular in recent years is the effective use of innovative technologies such as Big Data which allows us to better understand and assess customers’ needs and make more personalized services. Machine Learning allows to observe the users’ actions and let the system learn from these actions and then customize the service accordingly (as done in the modern smart-phones). As the internet has distributed the information and made it widely accessible, Blockchain is doing the same for value. It manages and secures the digital assets like ownership, stocks, digital currencies like bitcoins, and also eliminates the middlemen
- Smart Contracts are the advanced phase of blockchain which will radically change the way we transact business. They are self-executing applications run on the blockchains. Smart Contracts are being used in insurance, crowdfunding, real-estate and other financial sectors.