Explore the Changing Contribution of FinTech in Business
The darling of the startup world FinTech is itself a combination term or a tech-speak for Financial Technology first coined in the 21st century used to describe the technology used in the back-end systems of a financial organization. The industry of Financial Technology is moving at a break-neck speed and is expecting to deliver a faster pace of change in this year 2022 by making a rapid change in the industry of banking.
With the growth of the internet and a sense of digitalization, 2021 was a record-breaking year for FinTech as it makes sending money to a friend via PayPal easy or a cheque deposit in a bank by just snapping a picture of it with your smartphone, etc. These innovations are just the beginning as this year holds so much more record-breaking under the FinTech growth. It is being said that along with refinements of the old ones the coming year is likely to introduce new ideas like sustainability and diversity.
What exactly does FinTech stand for?
A multifaceted concept with the combination of the words ‘Financial Technology’ FinTech is an emerging digital technology that ensures the improvement and automation of the usage and the delivery of financial services. The revolution of FinTech has led to the development of mobile payment apps like PayPal, Venmo, Apple Pay, the development of blockchain networks and cryptocurrencies like Bitcoin, Dogecoin, and the development of automated portfolio manager and other social media payment options.
How does FinTech work in helping a business?
Driven by different technologies like Artificial Intelligence, big data, and blockchain FinTech simplifies financial transactions and redefines how companies transfer, store, and manage digital currency. With the help of AI, big data, and blockchain FinTech works on providing insights related to the spending habits of the consumer, predicting and changing business strategies, etc.
Other than these features, FinTech provides several ways which are helpful to change how businesses are carried out. The ways in which FinTech is helpful are:
Payment processing: FinTech helps streamline the payment process by cutting down the unnecessary steps, redefining the services, etc. Some examples related to clean payment processing offered by FinTech are Square, Payfirma, Apple Pay, etc.
Alternative lending: FinTech in business provides alternative lending services and new approaches to personal loans, new lending options, easy application experiences, etc. Some examples of alternative lending are Prosper, Lending Club, etc.
Robo advisors: Sometimes called wealth management and automated investing services that help make investing easy and inexpensive. It uses a machine-learning algorithm that helps in cutting out the cost. Some examples of investing services offered are Betterment, Wealthfront.
Blockchain: FinTech has its hand in Blockchain, Cryptocurrency, and trading that helps in providing you the best platform to invest in a lucrative collection of cryptocurrencies. Some examples of FinTech in blockchain involve Kraken, Coinbase, etc.
Customer service: Via research, analysis, and accurate prediction businesses can now learn the importance of customer service. With the help of FinTech businesses all over get a chance to interact with their customers, understand the problems, exchange real-time data, and others.
With the constant growth of financial technology for businesses and startups, there is so much more to follow and grow. The concept of FinTech covers a large variety of technology, services, and target audience. With FinTech there is an increase in accessibility and speed, business marketing updates, etc. which helps in the security and growth of the business.
Prominent Examples of FinTech
Innovations are only the beginnings, fintech is developing rapidly and is used in nearly every area related to finance and business. In recent years, India is one of the world’s fastest-growing economies that has helped FinTech to grow by adapting the minor and major concepts of FinTech like paperless lending, mobile banking, payment gateways, mobile payments, and others.
Fewer examples of FinTech offered by different companies under different industries are:
Robinhood: Covering the industry of stock trading, Robinhood is that stock trading company that offers a fee-free trading platform with an easily accessible online interaction. For its users, it offers commission-free stock trading, exchange of traded funds, as well as cryptocurrency trading.
Venmo: Covering the industry of P2P payments, Venmo is a popular service that provides its users to perform direct digital payments at low fees. The most amazing feature offered by Venmo is its social feed where the users can share and display payments with the friend list.
Wealthfront: Covering the industry of wealth management, Wealthfront is a FinTech Robo advisor that provides financial advice to its users based on the goals and data. The advice is passed via Robo Advisor collected by computer algorithms and software that makes an investment portfolio with external inputs.
Square: Covering the industry of business payment, Square is a service that helps businesses make transactions in a whole new way. Square helps businesses and its users accept credit cards on a smartphone, tablets, and other similar devices. It also provides the facility of printing receipts, sending and receiving virtual gift cards, etc.
Klarna: Covering the industry of E-commerce, Klarna is a FinTech company that provides the privilege of doing payment services actively. It offers the features of direct online payments, payment after delivery, payment in installments, and other similar options.
FinTech Trends to Follow in 2022
Primarily driven by AI, big data, and blockchain technology, modern FinTech has redefined the ways in which companies transfer, store, and manage the finances and its related data. AI in FinTech helps in understanding the insights related to consumer behavior and spending habits, Big Data helps understand the changes of the market, and blockchain technology helps in performing decentralized transactions and overseeing potential changes and addition.
Powered by the most modern technology there are several trends and growth in the industry of FinTech to watch out for in the coming years like:
Growth in digital banking
As per the reports and research, FinTech has a bright future with many new technologies to mature in 2022 and companies adopting them.
Posted By: Mrmmbs Vision