WHAT IS FINTECH?
This word is a fusion of two terminologies, namely, finance and technology. It is a technology used in any business or industry to enhance financial services and its process. In much simpler terms, Fintech (Financial technology) refers to any company that provides financial services through the medium of software and technology, serving both the business and the customers.
It is a rapidly growing technology that helps manage financial operations through specialized computer and smartphone software that includes mobile payment, investment applications to the development and use of cryptocurrencies, like bitcoin and Gemini. It finds use in various sectors such as education, investment management, fundraising, banking, stock trading, etcetera. Hence becoming a more consumer-oriented technology. Fintech companies use integrated technologies such as data science, AI, and block chain to move the services safer and efficient.
BENEFITS
1) Money and time-saving
Being a Fintech company lets a much faster and efficient procedure rate for both the company and the users through specialized automated processes. The innovations, apart from being rapid, their reach is quite diverse.
2)Personalization and customer service
The ability of the technology to meet the consumer’s needs, customized in a way suited for them, helps in the promotion of the service. For every problem, there is a personalized solution explicitly designed to allow the user. They will raise money from potential investors with help in small businesses, non-profits, and charities through Crowdfunding platforms.
3) Flexibility
It allows the company/startup/artists to include any service wherever and whenever they want quickly. Fintech companies provide every product for every requirement of the consumer.
Stats on Fintech(since 2013)
$3 billion — global fintech investment in 2013
$950 million — the amount invested in Silicon Valley-based fintech in 2013
$781 million — the amount of fintech investment in the UK and Ireland since
2004
1/3 — The portion of global fintech deals that took place in Silicon Valley in 2013, quickly confirming the Californian tech hub as the current global fintech capital, but London is an eager challenger
51% — Year-on-year growth rate of Fintech in London
26% — Year-on-year global growth rate for Fintech
23% — Year-on-year growth rate of Fintech in Silicon Valley
69% — Percentage of European fintech funding for Fintech based in the UK and Ireland
Challenges to Fintech companies
Like every other startup in this field, too, there are challenges faced by companies. People can overcome these challenges with broad thinking and technology use.
#1 Trust
Everyone loves their money and cannot invest in a place where they do not have trust. The Fintech companies have no central control of the flow of money as they use blockchain for security. And new startups use bitcoins,ethereum as the currency.
#2 Underbanked population
The term unbanked or underbanked means being economically underprivileged obstructs Fintech Startup. It includes people who often don’t use financial services. Fintech can help address these problems by the distribution of services by the medium of smartphones or point-of-sale devices.
#3 Regulatory Laws
Companies form rules and regulations to protect rights and prevent fraud, but they also hinder the staggering development of Fintech startups in the financial market. They are barriers for Fintech novices since they have to carry out certain formalities before operating.
#4 Cyber Security Threats
“Financial services firms are 300 times as likely as other companies to be targeted by a cyberattack — and dealing with those attacks and their aftermath carries a higher cost for banks and wealth managers than for any other sector.”
— BCG Report
Fintech firms are prone to security issues such as phishing ransomware and Distributed Denial of Service (DDoS). The fintech companies handle confidential information; hence it is essential to maintain data security.
