In today’s digital world, people want fast and easy ways to manage their financial lives, whether it’s applying for a loan or keeping tabs on their overall spending. In fact, people use between 1 and 3 apps to manage their financial lives. That’s why many businesses and startups are investing in financial technology (FinTech) to create newer (and better) financial services for both people and businesses.
FinTech isn’t a new thing, but it has changed greatly in the past few years as shifts in consumer behavior and technology have reshaped the industry. In this article, we’ll cover what FinTech is, how FinTech has changed, and what you need to know about it.
What Is FinTech?
In a broad sense, FinTech is any technological innovation in financial services. Recently, it’s become known as the basis for end-to-end processing of financial transactions on the web through cloud services. This technology helps people with things like equity financing, consumer banking, and personal finance.
Not sure how FinTech has changed traditional financial markets?
Well, it’s pushed banks to rethink in-person services and find newer ways of engaging with customers online. It’s also lead to a consumer demand for online, cashless transactions, as 51% of purchases are now made online.
FinTech technology ranges from basic payment apps like Venmo to financial management services like Mint to even more complex software solutions like artificial intelligence. It’s also driving changes in the insurance industry as well as the trade sector.
How FinTech Has Changed
After the 2007-2009 financial crisis, many big financial businesses were slapped with regulations, which provided FinTech firms and startups an opportunity to ramp up their technologies and services. Since then FinTech has been evolving to meet the new consumer and business trends. Here are some new trends and how FinTech has changed to meet them:
Banks & FinTech Companies Are Collaborating
Most people rely on banks to deposit their paychecks and apply for large loans. But these banks lack the relevant technology needed to attract younger customers. FinTech startups have this technology but lack the capital and customer pool of bigger, more established banks.
Banks and FinTech companies are now partnering to increase their efficiency and offer younger customers the technology they demand in our new digital world.
Everything Will Be Automated
FinTech is changing to meet the consumer demand for automation. Chatbots are reinventing the customer experience and cutting down on the cost of services. The bots can help customers with everything from managing their money to even applying for a mortgage.
FinTech is also adapting for advanced machine learning to provide customers with a more frictionless service experience. This technology is letting customers quickly upload documents via their smartphone and will assist them in getting quicker credit checks done.
Security Is Key
Another way how FinTech has changed is how it’s shaped security efforts in financial management. More and more businesses are experiencing security breaches that leave customers feeling vulnerable. Fintech is minimizing the risks of these breaches by introducing verification methods like fingerprint access and facial recognition.
While these technologies are still new, consumers are excited about them and eager to have that added layer of security.
Final Thoughts on How FinTech Has Changed
As technology and consumer demands evolve, FinTech continues to meet these needs with their innovative financial solutions. We hope this article has helped you to better understand what FinTech is and how it’s evolved in the past few years.
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