1FinTech
Uploaded by
Pradeep Patel1FinTech
Uploaded by
Pradeep PatelFinTech
Introducing A New Era Of Financial
Accessibility
Relevance: Science and Technology- developments and their applications and
effects in everyday life.
“It has become appallingly obvious that our technology has exceeded
our humanity.”
- Albert Einstein
FinTech (financial technology) is a catch-all phrase that refers to software, mobile
applications, and other technologies that help organizations and consumers
enhance and automate traditional forms of financing.
FinTech can range from simple mobile payment apps to complicated blockchain
networks that store encrypted transactions.
Fintech may appear to be a recent series of technology developments, but the core
notion has been around for a while. Early credit cards, which were available to the
public in the 1950s, were the first fintech goods since they eliminated the need for
users to carry actual currency in their daily lives.
Fintech expanded to incorporate bank mainframes and online stock trading services
after that.
How Has Fintech Evolved
Fintech has evolved from being associated with scrappy startups to becoming a
major component of established and legacy financial institutions in recent years.
Whereas the word was originally mostly associated with Silicon Valley-based
disruptors shaking up the big banks, several businesses have now partnered with
the incumbents they purportedly aimed to dethrone.
● Even as some of its versions falter, fintech has proven its worth in the face of
the coronavirus outbreak.
● Going online or using a bank or credit union's mobile app can also prevent
from getting longer-than-usual phone wait times.
How Does FinTech Work
While fintech is a multifaceted idea, it is possible to obtain a solid grasp of it. FinTech
makes financial transactions easier for consumers and organizations to complete,
making them more accessible and affordable.
It can also refer to businesses and services that use AI, big data, and encrypted
blockchain technology to enable highly secure transactions within a company's
internal network.
● It aims to simplify the transaction process by removing potentially superfluous
stages for all parties involved.
● For example, a mobile payment service like Paytm or PhonePe allows you to
pay others at any time of day by sending money directly to their bank
account.
● If you paid with cash or a check, however, the recipient would have to go to
the bank to deposit the funds.
How Does Fintech Affect People
The financial services industry isn't usually associated with agility. Today, however,
consumers and business owners expect and increasingly require adaptability and
rapid iteration.
Fintech helps speed up activities like seeking a credit report or sending an
international money transfer that used to take days, weeks, or even months.
● Platforms like Paytm and UPI are able to complete these activities in a
fraction of the time it took even five years ago.
● Fintech has been proposed as a way to speed up normally time-consuming
operations such as the distribution of economic stimulus funding.
● Fintech has the potential to enhance financial inclusion in some parts of the
world, where governmental or institutional backing is insufficient.
The Technologies That Power FinTech
The driving force of modern FinTech are AI, big data, and blockchain technology and
they've totally changed how organisations move, store, and safeguard digital cash.
Businesses may use AI to gain important insights on client behaviour and
purchasing habits, allowing them to better understand their customers.
● Big data analytics can assist businesses in predicting market changes and
developing new data-driven business strategies.
● Blockchain, a newer technology in finance, enables decentralised transactions
without the need for third-party input.
● It utilises a network of blockchain participants to monitor prospective
changes or additions to encrypted data.
How Safe is FinTech
Consumer trust is one way fintechs have changed the financial services business in
an innovative way.
A notable trend emerges from the EY report: The desire to employ financial tools
developed by unconventional (that is, nonfinancial) entities was stated by 68 percent
of respondents.
Moreover, 89 percent of SME adopters said they were eager to exchange data with
fintech firms.
Consumers and corporations no longer require Wall Street cachet to hand over
financial data or even their hard-earned cash to platforms.
● It needs to be seen whether this faith is well-founded, or whether the
advantages outweigh the risks.
● Engaging with fintechs, many of which are still completely unregulated,
especially in the wild west of cryptocurrencies and blockchain, might expose
you to undesired or unanticipated threats.
● The notion that fintechs are held to a higher moral standard than major banks
is also proving to be a myth.
● Many promising firms are facing challenges both due to and independent of
the coronavirus outbreak
What Does Fintech Hold for the Future
Nobody knows what fintech advancements are on the horizon, and the upheaval
generated by the pandemic only adds to the uncertainty.
Early 2020 forecasts that the mature sector will continue to grow in 2020 proved to
be only partially correct.
Fintechs have faced financial difficulties - some have had to lay off employees, while
others are struggling to gain investor backing as they make fast transitions to virtual
meetings with venture capitalists.
● Interest rate cuts and the coronavirus-induced economic roller coaster,
according to Deloitte, have upended industry beliefs about fintech's
immediate future.
● At the same time, demand for fintech has never been higher: businesses and
banking clients alike are increasingly turning to technology to help them
manage their finances.
● Fintech's larger and longer-term trends have remained basically unchanged.
● Legacy banks and fintechs appear to be merging, forming alliances, and
continuing to collaborate.
● Consumers should also expect to see companies promising glitzy, headline-
grabbing technologies like blockchain, cryptocurrency, artificial intelligence,
and peer-to-peer transactions continuing to emerge.
Current FinTech Trends
Fintech has evolved and grown in reaction to changes in the broader technology
sector over time. Several current themes will determine this rise in 2022.
Digital banking continues to expand
● It is now easier than ever to use digital banking.
● Many people currently use digital-first banks to manage their finances, seek
and pay loans, and acquire insurance.
● The global digital banking platform market is predicted to rise at a compound
annual growth rate (CAGR) of 11.5 percent by 2026, owing to its simplicity and
ease.
Blockchain
● Blockchain technology enables decentralised transactions without the
involvement of a government or other third-party organisation.
● For years, blockchain technology and applications have been rapidly
expanding, and this trend is expected to continue in 2022 as more sectors
turn to enhanced data encryption.
Artificial Intelligence (AI) and Machine Learning (ML)
● AI and ML technologies have reshaped the services that fintech organisations
provide to their customers.
● AI and machine learning can help businesses cut expenses, improve client
value, and detect fraud.
● Expect these technologies to play a bigger part in fintech's progress as they
become more affordable and accessible, especially as more brick-and-mortar
banks become digital.
Conclusion
How has fintech fared in the COVID-19 pandemic and the economic chaos it
unleashed is evident everywhere. At the outset, the pandemic helped some
fintech niches, particularly digital payments, while sidelining others, including
digital lending.
We're living in a digital-first world now. There are opportunities for fintech
companies that are able to do things faster in a more consumer-friendly
manner.
These solutions are meant to reduce risk while helping to drive efficiencies
and cost reduction for banks. “With everyone focused on cost-cutting, there's
