Fintech is portmanteaus of the terms of finance and technology. It is referring to any business that uses technology to enhance or automate financial services and processes. The term is a broad and rapidly growing industry serving both consumers and businesses. From mobile banking and insurance to cryptocurrency and investment apps, fintech has broad applications.
How does fintech work?
- Fintech is not a new industry and it has evolved very quickly. Technology has, to some degree, always been part of the financial world, whether it is the introduction of credit cards in the 1950s or ATMs, electronic trading floors, personal finance apps and high-frequency trading in the decades that followed.
- The guts behind financial technology vary from project to project, application to application. Some of the newest advances are utilizing machine learning algorithms, blockchain, and data science to do everything from process credit risks to run hedge funds.
- There is now an entire subset of regulatory technology dubbed regtech designed to navigate the complex world of compliance and regulatory issues of industries like you guessed it, fintech.
Why Fintech Is The Most Important Industry?
- Fintech is beginning to disrupt the financial world as we know it. The financial industry is more focused on technological innovation. It is so important, Malcolm Turnbull referred to it in his first speech as PM.
- Fintech is a financial technology and a digital revolution. It is about major changes to asset management, business and personal loans, fundraising, money transfers, and the way we invest.
- Fintech involves disrupting the way all businesses operate, as well as our personal finances. The financial industry is regarded as being the industry slowest to grasp innovation.
- But the wheels are turning. The driven by technology, the volatility in change, is their friend if we are agile and smart enough to take advantage of it.
What Are The Benefits Of Fintech?
There are following a number of advantages to fintech:
- Price: Fintech products are coming with lower prices that are better for consumers and businesses. These lower prices are used for algorithms to better judge. This is the risk of lending to someone or simply through the lack of legacy systems.
- Access to financial products: A benefit of fintech is globally increased access to banking and lending products. Small businesses are many benefits from better access to finance through fin-tech products. Consumers are benefiting from better insight into their spending and better interest rates through risk-based pricing. Simpler, automated investing is giving people options outside of savings accounts, and people living in regional areas. It will benefit by not having to visit a branch to conduct their banking.
- Improve your finances: Many fintech products are aimed at improving your financial position and aim to give you a better view of your finances. For example, neobanks and other banks offer to spend analysis and insights as well as notifications to help you understand exactly where your money is going.