Meta: Daily Financial News: do you ever see the advanced term fintech? If you don’t, you found the right place to discover every inch of this field. Read on!
Continuous staying updated with the latest news occupies an indispensable part of daily life, especially the financial news. Since there has been nonstop major chaos in the financial world as every second goes by.
Today, we would like to introduce a new prominent topic relating to finance – Fintech and its importance. This term has been too familiar to many people in the IT industry. However, Fintech is still a whole new thing to people who haven’t discovered it.
Fintech is an optimal trend for financial market in the future – Image source: Flickr
But if you have been here to learn, we are sure that you have a passion for finance and technology. Now you might be wondering: What does Fintech mean? How great are its applications in our social life?
This article will ultimately respond to your above questions. So let’s jump right in!
What Does Fintech Mean?
In general, Fintech stands for financial technology. In other words, this field is a combination of finance and technology to release a series of efficient products for consumers. To put it simply, Fintech refers to taking advantage of technological innovation for use in the financial sector, such as services and operations.
Wonderful high-tech applications dedicated for financial market – Image source: Flickr
These wonderful tools could create a new business model, changing the traditional product distribution channel. Because Fintech does not originate from existing monetary systems, it marks the encroachment of IT into those monetary systems.
Besides, Fintech also supports simplifying procedures to bring efficiency to businesses. More importantly, it will allow consumers to access services that meet their increasing requirements easily.
Financial News: Main Features Of Fintech
Over the last decades, Fintech has been fostering strongly with the highest speed than ever. Due to its versatility and diversified uses, this field has become a critical development component.
So, let’s discover the main reasons behind these successful steps of progress. In other words, we will find out what the main features make it the future of the financial sector.
Fintech Connects Borrowers And Lenders Without A Face-To-Face Meeting
With Fintech, all money transfer and payment services are done automatically, quickly, and efficiently. It is possible to connect borrowers and lenders through the internet without meeting face-to-face. All processes from customer search, registration, and related procedures are done automatically.
Fintech Works Based On The Development Of Artificial Intelligence
Fintech works like a robot with full functions such as identification, statistics, and at the same time, setting user needs, providing financial services through a pre-established algorithm system.
Fintech operate as a robot controlled by algorithm system – Image source: Wikimedia Commons
Today, financial technology is gradually changing users’ habits, especially in the financial sector, switching from the traditional form to borrowing money online.
Fintech Changes Human Resources In The Future
Another feature of Fintech is that it can alter human resources in the future. With Fintech, employees have to earn high professional qualifications and be experts in information technology.
On the other hand, when Fintech appears, there is also a relatively high reduction in the labor source. To put it in another way, one person can take on the work of many people.
The Importance Of Fintech Role In The 4.0 Era
Today, in the increasingly powerful digital technology era, it is super important with the appearance of Fintech. Here are some of the basic roles of this field.
Better Financial Service Channels
Today, Fintech constantly creeps into all sectors of the economy, such as online sales channels, digital banking services, internet banking, and mobile banking. This trend is becoming more and more popular and faster than expected.
That high speed makes transactions between banks and users easier, faster, and more convenient.
Advanced Technology Application
As a solid fulcrum, fintech companies provide enterprises with big data to help analyze customer behavior and save costs, improving product and service quality.
Big data assists financially sector to raise service quality – Image source: Pixabay
Shifting The Labor Market In The Financial Sector
As Fintech products become more and more common, the demand for high-quality human resources is also increasing. Especially, there will be extra labor resources in finance and technology information.
Three Aim Groups Of Fintech
Normally, the traditional financial market will include two objects: financial institutions (banks, investments, insurance, securities, financial companies) and customers.
Meanwhile, there are three groups of objects for Fintech, which keep an inter-relationship:
This group is a collection of independent enterprises specializing in IT. Their goal is to provide new services and products in the financial sector. The average customers of these companies are the users of fintech applications.
Even more interestingly, these customers can be final users and also financial institutions.
It goes without saying that financial institutions are a crucial entity in this financial industry, especially those that successfully apply technology advancements. Institutions increasingly cooperate with fintech businesses, realizing the importance of technology.
At the same time, these institutions directly pour money into fintech enterprises and research activities, thereby actively holding new technologies and dominating the market.
Customers are those who directly use financial products and services in general. They will benefit from the stiff competition among fintech companies or financial institutions.
Typical Products Of Fintech
Currently, customer requirements have grown dramatically. Thus, products from Fintech must always be diverse and breakthrough in terms of versatility and efficiency. Therefore, dedicated fintech companies always update and provide convenient services for customers:
Bitcoin cryptocurrency is the most outstanding product that Fintech financial technology has created. Bitcoin is a decentralized digital currency researched by Satoshi Nakamoto, released in the form of open-source software in 2009.
Trading bitcoin through enhanced digital platforms – Image source: Pixabay
Bitcoin works as a cryptocurrency with the ability to exchange and transact through devices connected to the internet, such as computers and smartphones, without reaching a bank or any intermediary financial unit.
The value of Bitcoin is also seen as a real currency when it has a circulating value, settlement value, and reserve value.
An E-wallet is an electronic account that acts as an online payment. This platform enables customers to store personal information as well as buy and sell goods quickly and conveniently through the internet.
E-wallet offers you a fast and convenient payment – Image source: Pixabay
To use e-wallets, users only need to create an electronic account and pay all their expenses and bills without using cash. Your job is to make sure that your device is always connected to the internet.
Today, some of the most popular e-wallets are Apple Pay, Samsung Pay, Airplay, PayPal, etc.
This product can be considered a breakthrough in the financial market, which offers a much easier process of getting a loan. Through an online loan app, borrowers can access loans quickly without them going to a financial unit.
More conveniently, borrowers only need to stay at home and operate the app. Then the lender will instantly transfer an appropriate loan to the borrower’s bank account. On the other hand, the borrower only needs to transfer money to his account by online form when paying.
Online Money Transfer
This term is no stranger to us. Almost everyone has ever been annoyed when waiting in long queues to recharge and transfer money. Therefore, this Fintech product is a completely optimal solution to that problem.
Transfer money in a second through internet banking – Image source: Pixabay
With this high-tech platform, you need to log in to the money transfer application of your bank and then proceed to transfer money to other banks.
Moreover, you can operate anywhere and anytime, given that the Internet connection remains stable.
Support For Stock Trading
Instead of going directly to the stock exchanges as in the past, users can now participate in stock trading with just a computer or smartphone and an internet connection.
Robinhood, for instance, is one of the most popular stockbrokers in the US today. This platform lets investors carry out stock trading on the website through the application downloaded to the phone.
Robinhood’s user base has increased sharply to about 15 million in just the past six years, a desirable number for any finance application.
Compare Gobear Services
In the past, when you wanted to compare the financial services of companies, you had to go online and search for each unit and compare it. The whole process certainly wastes you a bunch of time.
But with Gobear – a progressive Fintech product, you can compare financial services of companies easily, quickly, and transparently.
Fintech’s Impact On The Financial Industry
Change Service-Usage Habits
We could easily see the big habit adjustment in restrictions at banks. Previously, customers would wait in long queues and have to do all the paperwork. But everything has been partly transformative in recent years.
Instead of wasting time, they need to open the bank’s app or go to the website to receive transaction support.
Several simple gestures to transact via digital website – Image source: Max pixel
Currently, most banks are developing the same route that is developing websites, banking applications, digital banking, mobile banking, tablet banking, and paperless transactions.
Support For Analyzing The Service Usage Behavior
Along with modern technical applications – Big Data, the report has analyzed thousands of customer behaviors using the service. This way, it helps banks and financial institutions develop new business strategies and service quality to attract customers more effectively.
Transforming From Traditional Financial Services To A High-Tech One
When everything connected by the Internet becomes a norm, modern digital platforms are important in development. In the past few years, social networks, digital banking, mobile banking, tablet banking, or sales channels through the internet appeared in mass at a terrible speed.
Another noticeable benefit of Fintech is to create opportunities for customers in remote areas that can easily access the service.
Pursuing The “Paperless” Trading Goal
This new trend follows after the trend of cashless payments. Predictably, there will be a bright prospect for the “paperless” trading trend as it will bring several advantages such as minimizing unnecessary paperwork costs and, more critically, protecting the environment.
Save time from doing online operation – Image source: Pixabay
Away from that, the large and small branches of the bank do not need to compete with each other to grow like mushrooms to meet the transaction needs anymore.
Instead, customers will be subject to restrictions on the app or the web, greatly reducing operating costs. More capital and effort are then put into developing and maintaining the quality of the technology.
Support Advanced Applications
The development of new technologies such as biometric authentication and electronic customer identification reduces administrative procedures, helps financial institutions save human resources, and customers save time and costs.
Fintech is a huge assistant due to the nonstop innovation in technology – Image source: Pixabay
Big Data will aid in analyzing customer behavior and support financial institutions in collecting external and internal data. This cuts down costs, facilitates decision-making, and improves service quality and customer satisfaction.
Labor Market Fluctuations In The Banking-Finance Sector
Technology is expected to displace many employees from financial institutions, insurance, securities companies, and banks. Instead, the need for high-quality human resources in information technology and financial expertise is focused.
Although it is a relatively young industry, Fintech has a promising future. In general, agencies, companies, and financial enterprises all expect Fintech to bring a new wave of explosive growth to the financial market in the future.
Will Fintech Replace Banks?
A traditional bank has a long history and brand name, specifically operating experience. Nevertheless, compared to Fintech companies, banks always have a certain lag in terms of technology. Fintech companies are dominating the race for market share.
In other ways, the traditional bank industry may be far behind Fintech.
Is Fintech Worth The Investment?
According to CNN, new fintech transactions globally have reached a record amount of $ 93 billion from the beginning of the year to now. Statistics show that 101 large deals were made only in the third quarter of 2021, with a total value of 23 billion USD, an increase of 250% over the same period in 2020.
Over the past time, Fintech has grown thanks to the rapid development of electronic payments exponentially. Globally, electronic payments have escalated with the change in consumer behavior.
The above facts show that the potential that Fintech brings is extremely great for the future of the financial market. So we can say that Fintech is completely worth investing in.
Learning financial news constitutes a crucial part of enriching your knowledge. Particularly in this article, you have added a room of all fintech information in your memory.
Hope you have done well and comprehended the whole fintech-related facts.