It doesn’t matter if you are an entrepreneur or directly involved in the financial sector; you must have heard about the word Fintech. It has been one of the major trending topics in the payment and financial sector. Fintech has made global investment increase from about $930 million in 2008 to over $12 billion at the beginning of 2015. This figure was projected to have hit $20 billion at the end of 2017.
Summarily, the Fintech revolution is here to stay. This is why this era is the best time to join the bandwagon and use the opportunity to invest in the financial sector. What is Fintech? Fintech is the short term that refers to the technology used for the back-end software of companies in the financial sector. According to the Wharton School of Business, Fintech is defined as “an economic industry composed of organizations that utilize technology to improve the efficiency of financial systems.”
Fintech basically involves the application of technological know-how to improve the services of the financial sector. It either entails the simplification or re-inventing of a process to improve its efficacy and make it more engaging for the end users. The technology in Fintech refers to the growth of new tech such as analytics, blockchain, big data and artificial intelligence.
The Fintech revolution has opened up a whole lot of options in the financial sector, They are explained below:
- Digital Payments: As better payment options are getting more popular, Fintech organizations have introduced smart, convenient and quick payment methods for their clients. For instance, PayPal is a popular payment method used in the United States of America. With a PayPal account, account holders only require an email address to send and receive payments. Some of these payment options are famous globally and it is foreseen that ATM services would soon be in the past. Digital payments would soon be favoured by all and sundry.
- Alternative lending: Most banks have realized that ordinary lending to businesses doesn’t yield enough profit. They have resorted to peer-to-peer lending based on mutual agreements. This sort of service is quite popular amongst investors and has developed in various countries. In developed countries, alternate lending services such as car title loans, mortgage loans, payday loans and money orders have become quite popular. An example of an organization where you can get a loan is True Financial.
- Robo Advisory: The idea of the Robo industry is to bring about financial advisory necessary to reduce the intervention of human beings. These financial advisories are carried out through some computer algorithms. Hence, human input is not required at all. For instance, Robo Advisory reduces the problem of inefficiency in Forex by ensuring that transactions between investors and the market are transparent and seamless.