Fintech or financial technology can be defined as technology that aims to automate and improve the delivery and usage of financial services. Mostly, fintech is used to help business owners, consumers and companies manage their financial processes more efficiently by using specific applications and software that are widely used on smartphones and computers.
Initially, the term fintech was used for the technology appointed at the back-end systems of financial institutions. However, since then, there has been a sudden shift towards more consumer-based services. Thus, we now have a more consumer-based definition. Imarticus’ fintech program can help you apply your skills in not only the financial sector but also industries such as retail banking, education, investment management and nonprofit organisations.
What is fintech and how is it used?
Broadly speaking, the term “fintech” is applicable to any kind of innovation in the ways people have business transactions, starting from the double-entry bookkeeping system to digital money. Because of the smartphone and internet revolutions, the fintech industry has grown immensely.
Fintech describes a number of financial activities like taking a loan using a smartphone, money transfers, managing investments, etc., without the help of a person. Fintech was originally referred to as the usage of computer technology which was applied to trading firms or banks, and now, it is described as a huge variety of technological involvements in commercial and personal finance.
The most funded and spoken-about fintech startups have some common characteristics. They are designed in such a way that they can be a threat to take over the traditional service providers by serving the deprived section of the population or providing better services. Here are some fintech examples of how it is used:
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Cryptocurrency and blockchain
Cryptocurrency is an exchange medium and it is used as a measuring unit. It has little value but is used as a measuring unit to value other assets. Blockchain is an immutable shared ledger that is responsible for tracking assets and recording transactions. Also, it is used to reduce fraud.
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Mobile payments
Mobile payment is a payment that is made through an electronic portable device like a cell phone or a tablet. Usually, payment services require the user to open a bank account and/or have a payment instrument which is linked to the concerned bank account in order to pay merchants online.
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Crowdfunding
The usage of capital in small amounts from many people to support a new business idea financially is known as crowdfunding. It uses the easily accessible vast networks of different people through the use of social media and other websites which brings entrepreneurs and investors together. Crowdfunding creates opportunities for many entrepreneurs to gather a large amount of money from anyone who has the amount and is willing to invest.
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Stock trading
Stock trading traditionally refers to any kind of selling or buying of stocks, but, colloquially it means a short-term investment that is made by active investors. Actually, stock trading is quite a risky and difficult enterprise, but with good knowledge, one can lower the risks and work. The selling and buying of shares of companies result in daily changes in their prices.
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Fintech savings and investment
In recent years, there has been an explosion because of fintech in the domain of saving and investing apps. Many companies have broken down the investment barriers. Every app is surely different in its approach, but all of them use a set of automated small-amount investing and saving methods.
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Fintech lending
The usage of financial technology that helps lenders make more informed and faster decisions is known as fintech lending. This includes the usage of different sources of data that helps to measure the risk in lending and connecting different digital platforms that improve the data by sharing speed.
What is the future of fintech?
The streamlined offerings combined with technology are what enable fintech companies to work more efficiently and help in cutting down the costs that are associated with transactions. Fintech innovations have really influenced traditional banking, trading, financial advice and many other aspects predominantly. For these reasons, traditional banks are now paying attention and they have heavily invested in becoming like companies which disrupt them.
New technologies, for example, artificial intelligence (AI), machine learning (ML) and data-driven marketing take up the habit or the guesswork of financial decisions. Learning apps not just learn the users’ habits but also engages users through learning games. Fintech is also an adapter of customer service technology using AI interfaces and chatbots to assist customers.
Conclusion
For becoming a master in fintech, there are many financial technology courses that one should surely check out. Imarticus offers one of the best fintech courses in India. This course will definitely open a lot of doors with great opportunities in this sector. So, gear yourselves up to get enrolled in this fintech course.
