A Guide For Understanding The Difference Between Traditional Banking And Fintech

Financial technology is the innovative and sophisticated technology and innovation which aims to replace traditional banking methods in the provision of financial solutions. Financial technology today is an ever growing and dynamic field. In this era of recession, financial technology is thriving like anything. The reason of its success is that it serves the purpose of making the life of common man easy by offering maximum value for the money spent.


This financial innovation does not attempt to replace traditional bank with any other bank. Instead, it augments and enhances the functions of traditional bank in a unique manner. It is also trying to make life of common man easy by providing maximum benefits in minimum cost. It has successfully carried out its mission of providing optimum benefit along with minimal efforts. The most important advantage of fintech is that it provides real time and accurate information which is not available with conventional banking methods. Through online, the data can be obtained in very short span of time and from anywhere around the world.

Online presence of traditional banks has been limited to a certain extent. The introduction of fintech has completely changed the concept of traditional banking. Now, anyone from anywhere in the world can gain access to financial information and perform financial activities online.

Fintech has made it easier for consumers to make purchases using their credit cards or pay bills with debit cards. Since traditional banking has not been able to provide financial solutions to the customers, online banking has emerged as the ultimate choice for the customers who are facing tough time due to credit crunch and slow economy. Internet is a huge platform where one can find all information on every topic. Today, internet is home to largest number of financial companies and e-commerce websites which are serving the customers from different parts of the country.

Internet has made it very easy for the common people to know more about different financial products like personal loans, mortgages, etc. Internet is also making it easy for the institutions to communicate with the customers and provide additional information on different products. Internet is becoming a popular source for the borrowers as well as the institutions to perform their monetary transactions. The main difference between traditional and fintech is that traditional banks lend money through a process called ‘carry trade’ whereas the online institutions lend money through secure means such as credit card processing or electronic transfer.

The financial sector is gradually adopting fintech industry for the benefit of both the customers as well as institution. A lot of innovation and investment has been made in order to adopt best practices for better customer experience. Internet has provided a platform for the customers to directly interact with the banks and get a better understanding of the various schemes and deals that are being offered by the institution. In the coming years, it is expected that the fintech industry would grow at a fast pace and would emerge as one of the leading sectors of the finance industry.