The Impact Of Fintech On Finance
Financial technology is the latest innovation and technology which aims to combat conventional financial methods at the service of financial instruments. It is a rapidly growing field which makes use of modern technology to enhance financial activities in finance. Financial technology is designed to provide complete financial solutions to business owners, no matter how small or large they are.
As many experts believe, fintech is not a new concept. However, it has come into limelight due to increasing popularity of platforms such as e-commerce websites. The concept of fintech goes much deeper than just providing financial services on the Internet. A company offering financial services over the Internet can be called as fintech. Some of the companies that fit this definition are the ones that offer online trading platforms for small investors, those that trade forex, stock, options, futures, mortgage, and indices; as well as online investing platforms.
The main difference between traditional banks and investment companies is that traditional banks still focus on dealing with customer deposits, whereas investment companies focus more on generating high yield investment opportunities. In addition, the latter focus on short term and long term investments. Fintech is a great solution for people who are not comfortable with transferring their money to bank. In fact, many of them are using their personal computers to access financial markets; some of them even manage to make money by trading in real time.
Apart from trading in stocks, options, futures, currencies, commodities, and stock indexes, fintech is also using big data analytics to provide personalized service to customers. Apart from this, fintech companies are making use of computer software to analyze financial trends and news. They use mathematical algorithms and artificial intelligence to predict the behavior of market trends and thus use different strategies to reap in profits. The main advantage that big data analytics offers to the fintech industry is that it reduces human error and increases productivity.
Traditional banks offer financial services like savings, loans, and investment. They also provide customer support through online banking and customer assistance via phone or email. Fintech companies, on the other hand, specialize in providing customized financial technology solutions for small businesses. By providing customized solutions to businesses, they are automating financial services for them.
Fintech companies have started offering a variety of products such as insurance, investment in commercial property, estate planning and management, and individual financial solutions to consumers. Apart from providing financial services to consumers, fintech is also entering the retail sector by offering financial products such as insurance and automated teller machines (ATMs). With the advent of internet technology, most of the transactions made by consumers are now done online. Therefore, fintech has become an essential ingredient of today’s financial system. While some sectors may be lagging behind, especially on internet technologies, the impact of fintech has created a dent in traditional finance.