FINANCIAL TECHNOLOGY
Globally, financial technology is evolving to enhance and build financial applications using AI/ML-driven, algorithmic digital technology. FinTech dramatically broadens the sorts of financial data that may be used. It lets organizations and individuals get insights, make automated choices, and take action.
What is Financial Technology?
Financial technology (FinTech) is the use of modern, disruptive technologies to simplify, streamline, automate, and expand the software, mobile applications, and services that were previously only available through traditional banking and financial institutions, according to Matthew p Schulman. Banking and brokerage, payments, credit analysis, insurance, loans, venture capital, RegTech, blockchain, and cryptocurrency are all examples of FinTech
Recognizing Financial Technology
Financial technology (FinTech) transforms how people access banking and financial services online and creates innovative new solutions.
FinTech uses robotic process automation (RPA) to automate transactions and regular processes by using predefined rules (algorithms) to make choices and perform actions automatically, according to Matthew p Schulman.
Data science technology (based on artificial intelligence (AI) or machine learning (ML)) is frequently used in financial technology, with organized and unstructured databases referred to as big data.
The implementation of open banking (data sharing with API integration) enables third parties to access and utilize consumer banking data and information for new FinTech apps with embedded solutions. Although open banking is regulated in Europe, Hong Kong, and Australia, certain nations, particularly the United States, are seeing open banking adoption driven by marketing rather than regulation.
Is Financial Technology Trustworthy?
To guarantee a secure user experience, certain FinTech software incorporates proper cybersecurity and fraud protection mechanisms.
According to Matthew p Schulman, Payments made through e-wallet applications cannot be retrieved once sent, and they are used to commit fraud. Some bitcoin FinTech sites have been hacked, or user account information has been used to steal large amounts of cryptocurrency from owners and exchanges.
What are the types of Financial Technology?
FinTech is being used in a variety of sectors to provide new financial services, information, transaction processing, and products, according to Matthew p Schulman. Financial technology broadens, automates, and simplifies access, transaction, decision-making, and approval paths.
Payments via mobile devices
FinTech applications include mobile payments. Mobile payments include digital e-Wallet payments and money transfers conducted using a mobile device (cell phone or tablet). Peer-to-peer payments, such as Venmo or Apple Pay, may be made via NFC (near-field communication technology) at physical stores or online.
Crowdfunding Platforms
FinTech crowdfunding sites, such as Indiegogo, have changed non-accredited investor stock raising and other sorts of financing. Crowdfunding sites such as Indiegogo and Kickstarter are used to raise product finance, according to Matthew p Schulman. Indiegogo raises equity for entrepreneurs whereas Kickstarter does not. GoFundMe was created to finance appealing personal need campaigns through crowdsourcing.
International Money Transfers
FinTech applications have made international money transfers simpler. International money transfers can be conducted via a worldwide bank (financial institution) network, such as SWIFT, for international wire transfers, or via an e-Wallet app, which allows for rapid transactions between platform user accounts or prepaid debit cards.