What is fintech?
The word “fintech” is a combination of “finance” and “technology.” The concept refers to companies that use technology to improve or automate financial processes.
For example, fintech is used in the form of mobile banking, insurance, or cryptocurrencies.
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Many traditional banks support and embrace technology today, which is one of the driving factors in the industry. This can be through active investments or collaboration with fintech companies.
How it works
In the early 2000s, using the Internet in the financial sector became more common. Since then, technological development has led to the creation of new fintech companies.
Where fintech was previously used for the internal system structure in banks and other financial institutions, today, it has evolved to include various other applications aimed at the consumer in the form of digital financial services.
For example, technology makes trading stocks, paying for takeaway, or managing insurance policies possible.
Many fintech companies also allow consumers to accept payments through various methods, changing how consumers manage their finances.
Artificial intelligence, blockchains, and data sets
Fintech companies use a variety of different technologies. Below is a list of examples:
- Artificial intelligence (AI): Helps financial institutions develop better strategies by providing insight into customer consumption habits. This can also be AI-powered chatbots that help serve customers.
- Blockchain: Used to store information about money transfers and provides a secure way to buy, sell, and store money. Cryptocurrency exchanges are a good example.
- Big data sets: Can predict customer investments and market changes so companies can create new strategies and plans. The large amount of information includes customer data, transaction data, and much more, and it can be used to discover new patterns and trends and improve customer experiences.
Examples of fintech
In general, fintech covers a wide range of technologies such as mobile apps, artificial intelligence, web-based tools, and much more.
Below are some examples.
Have you heard of MobilePay? It is an example you are likely to have encountered in your daily life. MobilePay is one of the many apps available today that make it easier and faster for users to make and collect payments.
Today, there are many online options for using banking in the form of online banking. But fintech can also be used for mobile-based banks that offer services previously only available through physical banks.
Fintech is widely used in the insurance industry, where technology helps improve customer experiences and increase efficiency. For example, it analyzes large amounts of customer data, so insurance companies can better understand their customers. It can also be used to calculate insurance prices for customers.