New technology means changes to processes. It can also reshape industries. Take the finance industry. It has been reshaped by fintech. I am sure you have heard of this term, but do you really know what it is? Fintech is a term made from the combination of finance and technology. Fintech has made technological advances in personal and commercial finance, including trading, investments, wealth management, transactions and payments, lending and borrowing and retail banking. It has also improved fundraising and financial literacy.
Originally, fintech was used behind the scenes with the back-end operations of financial institutions. As fintech technologies became more advanced, more banks started to utilize them and offer their customers a wide range of services, such as real-time banking, e-wallets and mobile payments. Business owners now have more options on borrowing and payment platforms. Instead of going to a bank, businesses can go to alternative lending companies for loans, and with better rates. Also, many startups use fintech for their banking and business model. It provides an easy way to send and receive payments, manage finances, make purchases and more.
So, why should we care about fintech? It makes our lives much easier by saving us time and money. It gives us more choices in the way we handle our finances through education and software (apps). We can get financial advice from a robo-advisor and make a trade in real time. We can use cryptocurrency (e.g. Ducatus Coin) and to pay for a variety of purchases, from travel packages to a cup of coffee. It’s also good for local and global economies. Fintech hubs have started popping up in Europe (e.g. Lithuania), creating more jobs, including researchers and innovators. These hubs put a spotlight on these cities, which, in turn, increases tourism and investors. Even retail is enjoying fintech by using data to create customized retail experiences for their customers with coupons and on-the-go pricing.
While there’s much promise in fintech, concerns about technology replacing human skills have been brought up by people. Cyber threat is likewise a pervading concern for many. Despite these, one thing is for sure: fintech is here to stay and will only get bigger and better. How much you use fintech will determine your comfort level. For those who have their doubts about fintech, ask yourself this question: Could I go back to the way I used to make purchases?
Ducatus Global 