FinTech or Financial Technology has got a huge response from investors in the last couple of years. The last 3 years have actually seen investments worth $100 billion in the sector. The ultimate goal of FinTech is a world where cashless transactions will be the norm and from the trend now, it seems that this will be achieved sooner rather than later.
With FinTech being adopted by so many financial companies, people can now beat the hassle of going to the bank, standing in a queue and then having a mound of paperwork to be filled. So what is FinTech and is it all about?
What it is
FinTech is basically technology that has been put to use in the financial sector, which means the technology that financial companies are using for the backend process of their business. From the setting up of servers to software applications and the frontend as well, FinTech is everywhere. The actual definition of FinTech may well vary from one source to the next but it can be said to differ from traditional financial services in the way it deals with payments, fundraising, loans, asset management and money transfers.
Who is FinTech?
Understanding who FinTech is can be the crux of the whole discussion. Originally, this was a term that was given to the IT or server room of a business but at the moment, the term is wholly owned by emerging startups and established enterprises belonging to the financial sector. Anyone who is part of the financial service sector and has made technology a part of their operations can be called FinTech.
A few industries that have made FinTech their own are:
- 1Cyber security
- 2Quantum computing
- 3Digital currencies
- 4Data collection
How the business ecosystem is changing because of FinTech
The adoption of technology by the financial service sector will totally change the business ecosystem. The speed and accessibility increases when technology is incorporated into the financial sector. With technology, financial companies are now able to utilize internet connections, big data and mobile connectivity into business to bring accessibility and speed to their customers. Also, real-time updates are possible because of this and this enables financial companies to stay in touch with their customers in real-time.
How FinTech is touching the financial sector
With smartphones seeing the biggest penetration last year, it can be said with a lot of confidence that the year 2017 is also going to be big for the smartphone sector. And that will directly affected what FinTech does and how it affects the financial sector.
- 1Mobile payments become easier
- 2Artificial Intelligence
- 3Biometric security
Paying using your smartphone may be already something you do. Mobile payment transactions in UAE and Saudi Arabia have gone up and more people are doing it. In 2017, more people will be buying smartphones and more of them will be using mobile payments. And all thanks goes to FinTech because it has made it easier for both retailers and customers to use smartphones for transactions. This will definitely impact daily lives of people in a more profound way.
Forget sci-fi movies of yore because the era of Artificial Intelligence is upon us. With Artificial Intelligence, FinTech will be able to make more headway into people’s minds by understanding their needs and meeting them more effectively. Using big data and predictive analysis to give customers what they need is what can be expected.
FinTech will make biometric security stronger this year. Security is very essential to financial institutions and with technology, offering a higher level of encryption and security to customers will become easier.