With waves of digital innovation taking over banks and financial corporations, the demand for fintech solutions is growing the market by a rapid shift.
A Quick Definition of Fintech
A portmanteau of both the terms, ‘finance’ and ‘technology’, fintech can refer to a business financial sector that has moved to improve its services and operational processing for digitally-minded customers. Fintech companies combine the use of advanced technologies replacing their traditional banking system with higher efficiency and innovative payment gateway solutions which can offer better benefits to their customers. Today, fintech is considered to be one of the fastest-growing industries taking over every realm of finance available – from stock trading to credit transfers.
How Does Fintech Work and Why is it Important?
In comparison to traditional corporate and retail banks, the solutions offered by fintech are often affordable, easy to use and setup. Most of the time customers don’t complain about additional transaction fees and the laborious paperwork that involves a new account. Since operations are handled fully online, fintech leverages the needs of the end-user. Fintech also offers numerous opportunities to manage data through the use of machine learning algorithms, blockchain and data science with a strategy planning scheme.
The Key Features of Fintech
- Payment Gateway
As a means to receive or make financial payments, payment gateways facilitate secure and cost-effective processes from the customer to the merchant without the need of a bank but backend parties such as app developers who do everything to remove hindrances that slow down transactions. The process is so simple that all it takes is the customer to select the products/service on the website and then proceed to the cart entering the required data to checkout.
- Bitcoin or Cryptocurrency
Although a different branch, bitcoin has been considered as part of the fintech services and has been poised to further grow and develop. Bitcoin is a novel concept of virtual or digital money set as a computer file put to store in a ‘digital wallet’ app on a smartphone or computer. Bitcoin exchanges allow users to buy or sell bitcoin in various currencies. However, the equation of per bitcoin differs in comparison to standard currency.
- Lending/ Crowdfunding Platforms
Another feature that belongs to the fintech category is crowdfunding platforms. By allowing internet and mobile app users to send and receive cash from other platform users, crowdfunding appeals to many individuals and businesses that want public support for large projects or a startup enterprise. There are several kinds of crowdfunding programs out of which are reward-based, loan-based and invest-based crowdfunding.
- Robo Advising
With Robo-advising there is no need for investors to visit physical stock exchange institutions. As a highly advanced fintech solution integrating smart algorithmic technologies, Robo-advising serves to disrupt stock-trading sectors by allowing investors trade stocks and budgets using their electronic mobile devices hasslefree.
