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Fintech, an abbreviation of financial technology, is technology that is used to support and improve financial services, such as those found in traditional banks. Fintech attempts to increase access to financial services and activities for a wider range of people. Any application or software that involves financial information is considered fintech. While many traditional financial institutions have added fintech offerings, there are also many fintech startups that attempt to implement technological solutions into every aspect of their organization.
These days, fintech is a large part of consumer’s everyday lives, though many do not realize they are utilizing such technology. With the proliferation of smart phones and mobile devices, people have easy access to fintech such as mobile payment services (such as Apple Pay or digital credit cards), digital money transfers (found in mobile banking apps and standalone applications such as Venmo), cryptocurrency and blockchain technology (as seen with Bitcoin). Whereas many individuals previously had to rely on financial advisers for investments and purchasing stocks, there are now many investment management applications and software suites that allow for someone to be in control of their finances from the comfort of their own home.
Fintech companies can increase their reach and improve services through the use of cloud platforms. There are many benefits to a cloud service, but most notably around the different services that they offer, such as artificial intelligence (AI) and secure data storage. In a recent survey of global fintech leaders, over 50% of respondents stated that they saw artificial intelligence (AI) as being the technology most likely to revolutionize financial services. Through the use of AI and machine learning, companies can aggregate financial data and run analyses to increase their insights into their customer base. Furthermore, AI can also be utilized for customer interactions. Robo-advisers can be used to provide financial advice over the internet without the need for a human advisor. Cloud business models also allow for organizations to ensure their data is safe through increased security measures. For example, cloud providers offer firewalls, encryption, and limited physical access to servers in order to enhance data protection.
Fintech can help organizations in a variety of ways, such as: