What is fintech and how has it evolved?

With the entire world becoming increasingly digital, and indeed digitised, the financial services industry following suit should come as no surprise.

Image Credit

Fintech refers to financial technology. Broadly construed, this means any technology used to improve any areas of banking, financial management, payments, and just about any related field.

Fintech has enabled the growth of internet business, but what else is the financial services industry coming up with to make things easier, or more profitable, for themselves and their customers?

Fintech in banking

There are dozens of major fintech innovations in the banking sector, with none more ubiquitous than online banking. What was once an absolute niche product is now how most people conduct their finances, with many banks creating mobile apps to make life even easier while maintaining security.

More recently, fintech has enabled online-only banks – banks with no physical footprint at all. As of 2016, more than 12 per cent of people in the US used an online-only bank as their primary bank.

Image Credit

Fintech in personal finance

For individuals, fintech has opened up the world of financial management and personal finance advice, with a slew of websites and apps allowing easy investment management with little to no face-to-face interaction required.

Even mortgages have stepped into the online realm, with many financial institutions adopting online platforms for mortgage information and application.

For financial advisors, fintech produces constantly-improving financial advisor software, which is available from companies such as https://www.intelliflo.com/financial-adviser-software. This improves client management abilities, data security, and possibly even return rate based on statistical availability.

Fintech in financial risk management

For traders and insurers, fintech largely takes the form of improved risk management technologies. At a basic level, statistical analysis allows mitigating the risk to both themselves and their customers, while improving technology increases the speed and accuracy of the models.

More recently, these groups have begun to adopt AI neural networks to look beyond what they have modelled and to spot emerging trends or risks based on unfathomably huge data sets.

Fintech in payment processing

With business taking place increasingly online, much of the western world is moving away from a cash economy. Payment providers such as PayPal have paved the way for apps that turn phones into contactless payment devices and for peer-to-peer payment services offered by major banks.

Comments are closed.