FINTECH is called as a financial technology and it is a new initiative and has finance experienced firms, which gives zone-specific accessories and services which is managed by many conventional financial firms namely banks, asset management companies, and insurance companies. Financial technology has been worn to regulate investments, insurance, trading, banking services and risk management.
It is a growing industry that provides technology to improve activities in finance. Thus the creation of financial technology and its innovation are aimed to keep up with traditional financial methods in the delivery of financial services. The services may originate from various self-governing service providers as well as with atleast one licensed bank or insurer. The interconnection is enabled through open APIs (Application Programming Interfaces, are the hooks and software used by programmers to build applications that connect to other firms and technology. Banks with APIs enable fintech firms to build apps that utilize their infrastructure, like checking account balances) and open banking and supported by regulations such as the European Payment Services.
The simplicity involved in using FinTech products and services was commonly the most attractive feature. FinTech has become a disturbing new market force. FinTech has its effect in Bank revolutions also.
Banks Transformation by Fintech Force
Fintech has brought unparalleled disruption in the financial services network. Earlier Fintech was used as back office functions by software to help banks manage customer databases, execute transactions and handle accounts. Now, with Do-it-yourself modes where customers rely less on a brick and mortar bank for their banking needs, and gain digital channels at their disposal with 24/7 access. Therefore, digitization has fundamentally transformed banking.
Mobile payment revenue worldwide in 2015 was Dollar 450 billion. Smartphones with new updated applications have given customers the advantage of real-time transactions. Payment apps combined with bank accounts permit unified mobile to mobile payments, online payments, investments and transfers.
Key Fintech Trends
- With omnichannel banking enabling customers to use social, online, mobile channels which reduce customers visit to neighborhood branch.
- Automation with Machine Learning and Artificial Intelligence makes banks like UBS Group AG and Goldman Sachs have already put an AI/ML based solution in place Thus they managed to provide back end works with effective machines and make use of the knowledge gained through the process to calibrate financial services.
- Faster authentication done with biometrics which reduce the frustration that comes with multiple passwords besides providing advanced validation techniques.
- Blockchain make available transparency, minimizes risk, human errors and transactional fees. The spreaded ledger system of blockchain leverages are strict enough to control smart contracts and inspect data. Thus, blockchain said to be the perfect trading platform for securities exchanges.
Hope this article helps to understand the power of digital and the way digital disruption helping innovation in Fintech