Fintech refers to financial technology and it has been designed to disrupt traditional financial services through new technologies which will help address customer needs through automation systems. New Fintech companies aren’t constrained by legacy processes and system. Fintech firms can develop solutions that compete with the more traditional methods of offering financial services. Here are some technologies that FinTech is bringing to banking.
A Peer-to-Peer Payment System
Peer-to-peer or person to person money transactions are electronic money transfers made from one person to another through an intermediary which is usually in the form of an application. These systems are gaining traction with the millennial generation and are making their way to banks as well. This paper-free payment approach is very convenient and more popular with consumers today. In the future, it will take over cheques and cash payments as the preferred way of payment. All you need is an app to send or request money from other individuals. The process is immediate and it’s all digital.
Machine Learning and Artificial Intelligence
Some companies are using machine learning as well as artificial intelligence. AI can make a big difference as it can process a large volume of data that traditional analytics programs aren’t capable of handling. For example, it can look for a pattern of creditworthiness by analyzing all the available data. This can offer a faster, simpler and more accurate solution for firms that are involved in the analysis of important financial data.
Use of Mobile Technology
Mobile technology is now playing a major part in the financial sector. Fintech can help customers manage their money through mobile apps. Consumers can use these apps to view their spending habits or learn more about financial services or conduct transactions online.
A Robo advisor can supplement or replace a traditional financial advisor. This advisor can provide financial information to the consumer which is otherwise offered by a wealth management advisor. This would be more convenient and less expensive for the consumer. Many firms have started using Robo advisors to help supplement their regular services.
Expands Financial Services
Financial firms can expand their services by incorporating Fintech services to their existing system. They can make use of Fintech technologies to supplement and expand their current services. These financial institutions wouldn’t be competing with Fintech’s as they would be working with them to widen their web of services while reducing their capital expenditure.
Appeal of Fintech
Fintech ’s big appeal lies in its hi-tech features. It is faster in offering services that provide for customer autonomy, ease of use, and distinct capabilities. The present-day customers expect the kind of services that Fintech is offering them.
Fintech offers a wide range of services to customers and gives them more control over their finances. Banks and credit unions can use Fintech to help them engage their current customers while bringing new customers to their fold. With access to more information, they can manage their finances in a better way for the digital age. Fintech companies will expand their services in the future and banks will partner with them to provide a host of both traditional as well as digital banking services.