Fintech is a term that mixes up the two most important terms of all times Finance and Technology. It is a reference to the connection of both terms that are collectively called FinTech. This is a very broad term and can include all kinds of businesses. This newly founded industry is already catering to clients from all over the financial field, for example, insurance, crypto, mobile banking, and investment. There is nothing that is financially out of the league for FinTech.
How FinTech Works
In the most simplified form FinTech is basically financial technology. It is given in the name that Fintech is the term used to connect financial matters with technology. This industry is fairly new and coming to prominence now. You might be thinking that technology is already part of a financial system like ATMs and finance management apps. But this is the next level of finances meeting technology. Technology is evolving every day and this is trying to keep up with the progress.
FinTech inculcates all the businesses and helps them with app management and credit and ATM card usage and safety services.
Uses of FinTech
Businesses are slowly inclining toward the services of FinTech. Even some of the old players of this game are also signing up for this amalgamation of finance and technology. FinTech is a huge ground with so many opportunities for everyone. People from every walk of life have access to the perks of FinTech. Here are some very common uses of FinTech:
Insurance is an industry that is moving to the use of technology at a rapid speed. There used to be so much paperwork earlier which was very complicated. Now things have changed enough that there is this term named ‘Insuretech’ which comes under the overall term of FinTech. It did take a bit more time than other industries to adopt technology but better late than never. There are so many automated systems that are part of the insurance process that makes it easy for the consumers. Most of the insurance process runs through technology for example house insurance, car insurance, and health insurance. All can be looked after through technology.
Insurance is a very old concept but Fintech has made it more attainable by removing extra formalities. FinTech has revolutionized this service of managing funds.
This is the expert area of FinTech. Payments are now made through the online platform more than ever. In a lot of the regions of the world, people have stopped carrying money around. These are all wonders of FinTech. Companies that handle payment have changed the whole scenario. Sometimes you don’t even need a bank account and everything can be handled through a virtual account made with a mobile number. There are so many mainstream names that handle money for their customers on different platforms. For example, Paypal, Payoneer, Venmo, and Zelle. All these companies facilitate consumers in transferring and paying money. This facilitation has caused so much development in the field of freelancing. People from all over the world are exchanging services and money using these payment services.
Trading with Machine Use
Artificial intelligence has taken over most of the financial world. It can be told with an assessment of where the market is going. A huge number of trading data is handled only through computers. The stock exchanges are now majorly working only on the computer that calculates the algorithms and predicts market trends.
The role of the physical stock exchange is decreasing day by day. There was a time when people used to sit for hours there to keep an eye on the market trends. Now everything is available online. You have access to market trends on your personal device anywhere in the world.
Savings and Investments
Just like insurance, FinTech has taken over the whole system of investments and savings. Huge savings of customers can be handled using mobile applications. There is an influx of applications that are responsible for keeping an eye on market trends and suggesting to users the best places to invest.
Consumers like to invest extra money in some profitable businesses but not everybody has a good eye for it. These applications make this decision easy for its consumers. Over time some platforms have made enough space for themselves that their users believe these platform’s guts more than their own.
Cryptocurrency is going through its best times. Technically blockchain and crypto are something outside the league of normal technology. But FinTech has found its way there too. There are online platforms and apps now that combine FinTech, blockchain, and crypto to make a collective user space for consumers. All the crypto finances can be managed through these platforms.
Crypto is watching its all-time boom and the number of crypto users is increasing every day. There are huge multinational companies like Tesla that are claiming that they will be accepting crypto payments soon. In this situation, these apps that handle crypto accounts are serving the people well who do not know much about crypto but want to invest in it. If this drift continues then in no time the world will be shifting to crypto and the credit will go to FinTech.
Everybody knows the benefits of online banking now. FinTech is the spine of this system. FinTech provides easy reach to bank accounts. Hardly anyone physically goes to the bank. All the baking matters can be dealt with on the mobile app. Especially in these times of pandemic anything that prevents someone from going to a public space rules the market. We have this phenomenon of Neobanks too now. Neobanks are virtual banks that do not have any physical branches and everything is handled online. You can use customer service online. All the banking matters like loans, payments, savings, and checking can be handled on these neobanks. Varo, Simple, and chime are some already established neobanks. It is almost like we are living in the future that financial experts were talking about two decades ago.