From the moment we wake up to the notification of our salary being credited to our account to the payment of dinner at a restaurant via mobile, the magic of the Fintech industry continually surrounds us. The word has been thrown around for a while, and it appears that fintech is a major part of our lives. But what is Fintech exactly?
What is Fintech?
Fintech literally stands for Financial Technology. In a raw manner, it is about the advancements that financial systems have observed through the availability of technology. As the world progresses, newer technologies and tools become available for us to harness. The revolution was in its nascent stage when the credit cards and ATMs were made available to the public. The major progress of what is called the Fintech revolution was observed with the coming of the internet.
Through the internet, financial services became available to all. The process used to be more back-end but now, the users could access the services more freely. Think about how with just one swipe, you can make heavy purchases from stores present anywhere in the world. The advancement helped fintech gain momentum.
Fintech and the Banks
Fintech is closely associated with the financial services provided by the bank. That is where it started and still has a stronghold on. Banks have always provided services like loans, deposition, withdrawal of money, checking accounts, et al. Today, the traditional methods are on the brink of becoming obsolete as everything becomes digital. Bank has better customer service now since the arrival of technology. Fintech has placed the banks on the internet and now, all these services are available online.
Yes, fintech is the boon that has made possible all the mobile apps and services. Mobile wallets, UPI systems, Net banking, and many such platforms which one can access just by a click or a swipe, are the products of the Fintech Revolution. Many companies within the Fintech industry enable these financial systems and make it easier for everyone. Digital loans’ access to one’s account and transaction activities online are also some of the features made possible by the Fintech industry.
Spread to other sectors
After the success in the banking sector, Fintech spread across other sectors as well. Since finance is not limited to the banks but in every aspect of a man’s life, Fintech is present everywhere as well. Maintaining its hold in sectors like education, real estate, insurance, and others, the fintech industry makes sure that every financial process is available as well as easily accessible by all.
The services are not just open to all but are also more efficient, speedy, and cost-effective.
There are many products of Fintech that have revolutionized finances. These include crowdfunding, cryptocurrency, blockchain, and others. These products help make the financial system more sophisticated and more likely to cater to the public’s needs. While some of these may be susceptible to cyberattacks, making the Fintech industry a risky business, it should also be understood that technology keeps on advancing and with every threat to security, the system becomes stronger and immune.
AI and Machine Learning
Fintech involves major employment of machine learning and artificial intelligence. With more powerful and competent tools like these being used by the industry, assistance to people would become more refined. The customer support is made better with the help of AI and ML. Not only this but the work is more error-free and processes stay far more efficient and faster. Cyberattacks and fraudulent accounts are detected and removed quickly. The generation of credit scores and financial trails is easily done. Money management is made hassle-free.
Fintech’s Social Impact
The Fintech industry enables the underserved sections of society to access the financial system since it removes the hurdles that may be present otherwise. The digitization of loans and other financial mechanisms allow a space of inclusivity. Since the whole system is now placed on the internet, anyone has the right to access it. Fintech services also allow the use of alternate data of a person to act as their financial trail which further makes the banking process convenient. The development of technology has ultimately trickled down to underserved people. With the assistance of Financial Technologies, they can finally access financial systems and be at par with everyone. Fintech has ensured equal opportunities.
The Fintech industry is not just a mindless rush into technology but is rather a sustainable project that takes care of all sections of the society. The industry has been striving to make available the financial systems to the mass and in that endeavor, it is trying to strengthen the Fintech Revolution. Especially among third world countries, the Fintech industry becomes vital. Through digital loans and convenient interaction with digital banks, more and more people in these countries would begin to prosper. Through financial inclusion, the progress of not just this industry but of the whole world would skyrocket.