” What if all the future financial services will be automated?”
It’s not a nightmare nowadays!
Understanding of FinTech
Fintech refers to companies that use technology to improve or automate financial services and processes. It is a combination of the terms “financial” and “technology.” The phrase refers to a quickly expanding sector that benefits both consumers and companies in various ways. Fintech offers a plethora of uses, ranging from cryptocurrencies and investment apps to mobile banking and insurance.
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.
Background of FinTech
Fintech may appear to be a fresh wave of technology innovations, but the idea itself has been around for a while. Since consumers were no longer need to carry physical currency in their daily lives. Thanks to the invention of early credit cards in the 1950s, they are generally considered to be the first fintech products made accessible to the general public. The development of fintech led to the inclusion of bank mainframes and online stock trading platforms. One of the first fintech businesses to operate primarily online, PayPal was established in 1998. This innovation has since been further transformed by mobile technology, social media, and data encryption. We now routinely use social media-hosted payment choices, blockchain networks, and mobile payment apps as a result of the fintech revolution.
FinTech And Financial Services
Few topics in financial inclusion have recently sparked as much enthusiasm (and uncertainty) as fintech. Financial services value chains are changing as a result of the endless variety of new businesses, business strategies, and products that are being inspired by digital technology. The link between particular innovations and financial inclusion is frequently inferred rather than established, despite the fact that many fintechs make this claim. Despite all the hype around fintech, it is difficult for funders, investors, and social entrepreneurs to determine which technologies are important for low-income, underserved consumers. The euphoria surrounding fintech may mask the dangers it brings to the financial system and customers with limited means.
To aid in understanding how fintech is developing and spotting innovative products for funders, providers, and regulators. Finding a variety of new business models emerging among fintechs, digital banks, and platforms at the level of individual financial services that allow challengers and incumbents alike to put practical, user-friendly, lower-cost solutions into the hands of poor customers so they can use them to improve their lives.
Top FinTech Product
Crowdfounding: Internet users can contribute and receive money from one another through crowdfunding platforms, and different people and corporations can pool cash that can then be utilized for a number of reasons. Kickstater, Wishberry, Indiegogo; are the example of Crowdfounding.
Mobile payments: Platforms for mobile payments are among the most popular fintech products available right now. They save a ton of time and effort and make carrying physical cash less cumbersome. In the past, mobile payments have been a major success and have aided in the recovery of the economy from various recessions.
Platforms for mobile payments contribute to greater transparency and less corruption. Google Pay, PhonePe, PayTM ; are the example of mobile payments.
Robo-Advising: The idea of robo-advising, which combines algorithm-based asset and portfolio management recommendations to increase efficiency and significantly reduce costs, is another lovely notion offered by fintech. With time, this idea has continued to upend the conventional asset and portfolio management industry. 5 Paisa, ET money ; are the example of Robo-Advising.
” Software, mobile applications, and other technologies designed to enhance and automate conventional forms of finance for both corporations and individuals collectively fall under the umbrella term of “financial technology,” or FinTech. FinTech can range from simple mobile payment apps to intricate blockchain networks that house encrypted transactions.
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Writer:-
Jannatul Kawser Riktha
Intern, Content Writing Department
Youth School For Social Entrepreneurs (YSSE)