Compiled by Chandni Shah
What is Fintech?
Financial technology (Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones. Fintech, the word, is a combination of “financial technology”.
With the new emergence of blockchain and artificial intelligence technologies, the financial industry is in for change. Financial industries like online digital payments, credit or debit card payments, personal loans, and asset management have changed drastically. With emerging fintech companies, banking sector realized the importance of digitalization.
Almost 90% of financial institutions have increased their efforts to innovate digitally, as nearly 50% of people exclusively used digital channels.
FinTech has a unique model of utilizing artificial agency and predictive analysis tools, which helps them analyze trends and prevent fraud. It analyzes vast amounts of data every minute to create insights and forecasts.
PayPal is one of the most famous internationally used digital payment platforms and was the world’s first FinTech company.
To name a few Indian players in FinTech companies are Paytm, ZestMoney, Cashfree Payments, LendingKart, MoneyTap,Acko,Kaleidofin.
FinTech is usually making its headlines with cryptocurrency used in its development. But its market share primarily lies in the traditional international banking industry, which has a multi-million trillion-dollar capitalization. Digital innovations and trends in financial technology or the Fintech industry are revolutionizing how people, financial organizations, and banks manage their money. In the last five years, modern advances have drastically changed how people engage with their finances.
A survey by Market Screener reveals that the FinTech market will be worth $28.05 trillion by 2024, growing at a CAGR of 6%. The actual reason behind this growth is the need for loans and insurance and increasing interest in investments.
Even though FinTech is one of the fastest-growing industries today, it also has challenges. Regulation is one such factor, and it is heavily regulated in most countries. But sometimes, due to the increased implementation of technology. It becomes difficult to relate to them. This has made these companies more vulnerable to hackers. Other challenges include long-fund raising cycles, missed out targets, and increasing losses, Data security, Big data & AI integration, Block chain integration
So it is safe to assume that. Such FinTech’s are far from overthrowing traditional financial institutions. It has a long way to go. Financial technology is improving and automating the process and services within organizations. However, these challenges push our imagination in new ways and encourage unparalleled growth, but there’s room for improvement.
