Fintech is a terminology that was given to products which functions cover two aspects: finance and technology.
It is a new definition in the market, and it will stay for a longer duration. Why? Because many companies are already adopting the changes and traditional bankers are worried, considering the growth FinTech industry has generated for the last few years will change the scenarios of market share. If we see the stats of burgeoning FinTech then 10 years back the global investment was $928 million and in current it is $2.97 billion, which is directly triple in amount.
Fintech has increased the level of access in financial services, especially in investment. Data collected through Artificial Intelligence covers a huge amount of people at a cheaper rate and provides easy investment advice. This implies that a specific asset level which was difficult to reach before is now opened for everyone. In several cases, lending is considered. Earlier, FinTechs are dependent on certain data sets, which turns down a lot of people and charge a higher interest rate.
But with the implementation of FinTech, the options are plenty especially in the financial sectors like investment, saving, banking. It is also making the ways of purchasing insurance, such that many options are available for consumers.
1. Different types of companies based on FinTech:
All of us wants maximum convenience in life, so mobile payment is not a surprise anymore. Around US$27 billion will be e-transaction payment in a year according to the prediction made by eMarketer. This is the reason behind so many types of e-wallet choices such as MobiKwik, Google wallet, etc. The innovations are not only happening in the front end rather it is also behind the scenes.
- Peer-to-peer lending- Companies like funding circle, Zopa and MarketInvoice have lent money to individuals and businesses and turned into new P2P investors. As P2P is slowly getting popular, people are also considering the new and different alternatives to establish financial sector. This may take a large portion of the market in upcoming years.
- Mobile payments- Mobile payment has become the trend of the new market. It allows the people to pay bills through their mobile phones. SumUp and Square are the type of finTech which has reduced the need to rush at bank everytime in need of money.
- Money transfers- Companies like TransferWise and Kantox has risen the P2P lending based on the market values. Earlier, banks were working as the medium to change the currency (necessary for international transfers) and to do that takes a specific amount for the process completion.
- Trading platforms- On early days, people use to go at banks for investment, funds. But after the arrival of finTech like Nutmeg, the tasks become easier and provides different online platforms at a cheaper rate in comparison to other alternatives. Even some of the services provide a researched platform and recommends specific funds and stocks for sustainability.
Mobile is playing the role of facilitator with time: Millions of people across the globe enables access to the internet through smartphones and becomes a primary way to access with other enterprises. Besides, all opportunities, there are challenges which need to be addressed like proper use of FinTech solutions to build a fruitful collaboration between mobile and finance sectors.
Mobile has become the most prominent medium to access the internet because of three main key factors.
- Online payment is more safe and secure and can be disabled whenever needed.
- Provides easy and convenient solutions without any extra effort. For example, without disturbing the security, password and codes are reduced.
- Provides a global solution for the authenticated and e-payment market.
A survey done by EY found that half of the consumers are using services related to the money transfer and payments and around one- fourth is using FinTech for insurance. Around 20% for investment and savings and 10% for purchasing and financial planning.
2. Technologies playing a key role in FinTech.
Machine Learning and Artificial Intelligence have expanded its usage toward the financial industries. With that, these sectors realized the need for improvement of customer services and hence, started working in filling the gaps. The implementation of AI has made the processes automated like data analysis, customer services and internal/external communication in the industry. Also, simplified the processes like fraud detection with the help of chatbots, mobile applications etc.
Data analysis and Cloud computing are helping in making predictions in case of customer requirement and need. That is why financial sectors are getting more benefit by utilising the technology and with FinTech mobile applications companies are facing high competition, so to come out from this companies are providing more secure, user-friendly solutions to their customers.
Social Platforms is helping the financial sectors. How? Don’t be surprised. As the number of consumers is using social media to gather the information about finance so, it’s the best idea for the financial sectors to get into these social sites for trading purpose. But, it doesn’t mean to do transactions on social platforms though it is giving an insight into finance. Social media has entered into the lives of people and through social trading platforms to share thoughts, queries, concerns etc.
3. The horizon is still expanding
Digital transactions have a huge opportunity in the coming years. The people who have been learning AI, are in the best position to meet the upcoming demands. Mobile Fintech applications are not only helping in transactions but also in feeding the data, For instance, the mobile camera can work similar to an optical card reader for collecting the data of a customer.
Author bio: Renu Bisht is a doyen of governing the digital content to assemble good relationships for enterprises or individuals. Renu is specialised in digital marketing, cloud computing, web designing and offer other valuable IT services for organisations, eventually enhancing their shape by delivering the stupendous solutions to their business problems.