Financial technology is the new innovation and technology, which aim to outpace traditional financial instruments in the provision of financial services to consumers. It is actually an emerging field that makes use of modern technology to enhance financial activities in the financial sector. There are various new products and tools introduced in this regard but it depends on the situation prevailing in the market whether these tools and products will be adopted or not. This article will deal with Fintech sector. So, let us begin by understanding how financial technology helps in the financial sector.
In recent years there has been a tremendous growth in the number of companies providing financial products and services using innovative technologies. Companies like Billabong, hemp Bureau, Timberland and Kiva are some of the renowned companies who are engaged in producing excellent quality clothing for the modern generation. Their success has encouraged other companies to take up similar manufacturing process in order to gain a competitive edge in the market. Due to this reason there has been significant growth in the number of biotech companies. Apart from this, there are also other benefits of adopting fintech instruments and technologies like automation, information technology etc.
Investment is one of the largest needs of modern society and most of the population opt for traditional banks for investment purposes. However, due to the current volatile economic conditions, investment advice has become a complicated affair. Traditional banks do not make use of mathematical tools and their decision making process is still based on manual processes. Fintech companies adopt automation and information technology tools in order to handle the increasing volume of business and customer demands. Thus, the role of investment advice and traditional banks are gradually converging.
Fintech companies and startups are emerging at regular intervals to provide solutions to financial problems. However, most of these companies are dealing with the domain of property and consumer finance where they can provide an innovative and simple solution to real estate investors and homeowners. Homebuyer financing has been another field that has gained importance after the recent recession. Fintech companies have started providing mortgage investment guidance and property mortgage loan refinancing services to cater to the needs of homebuyers.
The basic advantage of fintech startups is that they offer highly customized financial services and products to consumers at a lower cost. It has been observed that the growing number of biotech startups has directly contributed to the growth of traditional banks in various ways. Traditional banks have faced difficulties in the past because of slow growth in business and customer satisfaction levels. Online presence and online purchasing options have also helped the mainstream banking industry to gain a competitive edge over startups.
Online purchases have become the easiest way to make purchases across the globe. In fact, it has increased the global trade significantly. The biggest advantage of fintech is that customers can conduct all types of financial transactions including online banking, buying and selling stocks, mutual funds, bonds and options through their personal computers. The need for banks has also been reduced to a fraction of its earlier days as there are very few people around the world who still require traditional bank branches to conduct their daily financial transactions. The increasing demand for online financial solutions by consumers is expected to boost the job market for bank staffs worldwide.