The emergence of financial technologies has significantly affected the financial sector, which had to technically adapt to innovative technological solutions. Companies with outdated hardware find other ways of doing business not to be irrelevant to today’s consumers. The integration of financial technologies with financial services provided an opportunity to improve the quality of this area.
Let’s Understand The Concept Of Financial Technologies
Fintech (financial technologies) assist various financial institutions in regulating the financial aspects of a commercial business.
These include the following:
- applications – mobile and personal computers;
- business models.
Fintech is also innovative in that organizations apply new technological solutions to provide financial services to companies and consumers. This application ensures the competitiveness of financial companies, which is extremely important in a period of rapid development of technological innovations.
Most of the products that Fintech provides are designed as a bridge between financial services and technological solutions that improve the efficiency of services. Benefits include insurance, investments, transactions, banking applications, and more. It maximally focuses on consumer demand, facilitating financial transactions, regulation, and monitoring economic processes.
Fintech is trying to reach billions of people worldwide who don’t have a bank account. Thus, all users can fully access various financial services, eliminating the need for financial institutions.
Recently, Fintech was considered exclusively for the development of financial companies. But now, it is rapidly approaching the consumer audience of financial services because it is at the heart of conducting financial transactions.
Thus, financial technologies are designed to greatly facilitate and simplify access to the financial services sector.
Consider Illustrative Examples Of Fintech Apps
Let’s check out some examples of where Fintech is applied in various financial subsections.
1. Making payments using mobile applications
Currently, almost all owners of mobile devices (smartphones, tablets) use mobile applications for regular payments. Many different services have been developed that allow financial consumers to make payments and exchange funds on a mobile device or the Internet. Some examples are PayPal, Venmo, Alipay, and many others.
The insurance industry has also been affected by financial technology. InsurTech, insurance e-technologies, provide quick execution of various insurance services: life insurance, real estate, car insurance, and more. Introducing such technologies lets you draw up an insurance contract and make payments quickly.
IT innovations include artificial intelligence, cybersecurity, processing and analyzing vast amounts of information, and much more. All this significantly saves time for both parties: insurance companies and customers. InsurTech startups are very attractive for funding.
3. Crowdfunding Platforms
Crowdfunding platforms (such as Patreon) allow users to make financial transactions with other users (receiving and sending money) on the same platform. In addition, on the Crowd Funding platform, various organizations and individuals can collect funds from many sources in one place. Now it is possible to apply to investment companies without the participation of an intermediary for them to finance a specific project.
4. Investment regulation
As banking application development began much faster, allowing traders to trade shares, it became much more accessible for investors because they could buy and sell shares using mobile devices. Such intermediaries are called brokers. Today, many applications already allow even individuals to purchase shares, bypassing all the complexities that took place a dozen years ago.
The Main Advantages Of Fintech Applications
Such applications have a vast number of advantages because they help to solve many problems, but we decided to highlight the 3 most important benefits.
A. Small financial outlay
Innovative financial technologies significantly reduce economic costs for commercial businesses and consumers of financial services. Because traditional companies have no expenses, such as wages and rent, advertising, these costs can be saved by companies, which means they can invest the saved money in their customers.
Many automated processes have proven essential for operations such as risk lending. Moreover, there is less need for the actual presence of the consumer, reducing the cost of services companies provide.
B. Ease of use
Because the use of mobile devices has become widespread, the efficiency of transactions has increased. From this, it follows that the consumer will be able to gain more experience, the transparency of relations between companies and customers increases, and more information becomes available to the user audience. It allows for more efficient customer service.
Moreover, financial technologies enable financial services for users who do not have a bank account, thereby allowing them to serve every client who needs to provide financial services around the world.
C. Increased processing and service speed
Advances in financial technology have made it possible for electronic lenders to process applications and coordinate them throughout the day. Consumers want instant service, and with less information, they can get various benefits in seconds (or minutes).
Thanks to automated processes and artificial intelligence, financial companies will interact effectively with users because most people choose electronic services instead of visiting a financial institution.
Arnab Dey is a passionate blogger who loves to write on different niches like technologies, dating, finance, fashion, travel, and much more.