More commonly known as FinTech, financial technology describes any new tech that’s used to improve use and delivery of financial services. It’s technology that’s developed to help companies and business owners manage their finances more effectively. Essentially, it uses specialized software and algorithms to do this.
It first became used in the 21st Century and only used to discuss technology used in the backend of financial institutions like banks. However, soon there were consumer-oriented services created to do similar things, which led to the term being used on a broader scale. These days, rather than being localized to a bank, FinTech is now used across retail banking, non-profits, fundraising, education, investment management and more industries besides.
From a different perspective, FinTech also includes the development and use of cryptocurrencies such as Bitcoin. Recently, this type of FinTech development is making a lot of headlines. But it’s worth remembering that traditional global banking is still where the big bucks are made. So, where has FinTech had the most influence?
Increasing access online
Essentially, one of the main goals of FinTech is to create financial services that are easier to use, and this goes for companies and individuals alike. This means that there are more streamlined options within technology, allowing things to become more efficient, as well as reducing costs on transactions.
For example, fintech services used to be restricted to desktops alone. Nowadays, thanks to technology, apps, and smartphones, fintech can be found on mobile devices, making it easier than ever before to use.
One type of fintech are stock trading apps. Typically, these apps, such as Robinhood, have no fees in place for trading. Other apps of this type include ones that reduce rates for loans online. Many of these fast platforms secure working capital and can then offer better interest rates, reduced fees, and are generally more accessible than previous option. Because of these apps springing up rapidly, this has pushed more traditional institutions to follow suit, also investing in products and apps that offer these services.
New fintech ideas and options
Another revolution in the technological world as a whole is the arrival of artificial intelligence or AI. Application of AI has been used in multiple ways, but in fintech it’s typically for predictive behavioral analytics and used in data-driven marketing. And it’s not just used for finances, but in other areas too. For instance, while behavioral analytics can be used to take the guesswork out of how customers will make their financial decisions, it’s also used across other industries as well. Take the entertainment industry, specifically online casinos. There’s a growing use with this type of technology, to predict behavior and patterns in player behavior. Sites like AW8 Casino Singapore, can use this type of technology to see what games players like, and may play next, as well as checking for problem gambling behaviors. It’s also able to be used to detect fraudulent player behavior. In fact, it’s increasingly being used to fight fraud across the financial sector too. It does so by looking at financial history, payments, and can flag abnormal transactions.
Going back to finances, apps and software that can learn, also help to engage users when setting up more boring tasks such as budgeting and other financials. It helps consumers make betting spending decisions, remove unconscious spending habits and so on. It’s also great at automated customer service, something that, again, is prevalent across a range of different industries. Chatbots and other AI interfaces are great for assisting customers in basic tasks, while also removing the need for high staffing costs.
Fintech startups
There is a boom in fintech startups too, most of which have come out of North America. As mentioned, one of the most popular of these is cryptocurrency which takes place on the blockchain and allows for smart contracts. Following on from this, there is open banking, a concept that suggests everyone should have access to bank data to build applications for a connected network. Other startups are looking to simplify the insurance industry, while others aim to aid financial services meet money laundering requirements.
With so many options for fintech, the landscape is constantly changing. Investment, payment, and personal finance apps are all the rage, and only continuing to grow and develop.