Financial technology is simply the innovative technology and innovation which aims to counter traditional financial techniques in the efficient delivery of financial instruments. It is also an emerging market which makes use of cutting-edge technology to enhance financial activities in finance. The basic function of any financial technology is to offer financial tools and processes which will help people to make informed decisions in matters related to finances. In a time when financial resources are getting scarce, the demand for sound financial technologies is more than ever before. This is further enhanced by the advent of new technologies like Fintech.
Fintech is a very cutting edge concept and represents the next level of financial tools and processes. It is also designed keeping in mind the future scenario where the pace of communication and transactions are increasing at a phenomenal pace. Thus, a number of financial institutions are trying out innovative and cutting-edge methods to stay ahead of competition. Most fintech products aim at offering customers the best possible financial services.
There has been a drastic change in how people bank and transact. This has made the banking sector adopt advanced tools and techniques which are faster and more effective. Thanks to these innovations, the customers have started choosing online banking over physical money transactions. As a result, there has been a tremendous growth in the financial services sector and a huge leap in consumer spending power.
According to the experts, one should carefully study the term Fintech to understand what it is all about. Fintech is not a new term. The basic meaning of this term is “a new innovation”, “cutting edge technology” or “an innovative process”. Fintech companies use financial tools and techniques which are entirely different from the conventional methods of banking and hence, they are termed as fintech.
This kind of banking was initially introduced in the United Kingdom. In countries like the UK, the government encouraged the financial institutions to develop this innovative technique. In addition, the UK introduced various regulations for the protection of customers. As a result, various traditional banks started encountering problems and had to adopt new ways to serve their customers. As a result, the popularity of the fintech industry increased worldwide.
Online banking has become a popular and a very useful service. Some of the financial services companies offer customers with a range of innovative services, which include instant online access to their customer’s records, easy accessibility of their financial data and detailed reports about their expenditures and savings. These financial services companies are becoming more competitive by delivering more value to their customers. Moreover, many individuals are moving to the cities and are staying there for several days at a time, making it impossible for traditional banks to keep track of their customers’ whereabouts.