Financial technology, or fintech, refers to how financial institutions incorporate technology to deliver services in a way that is different from traditional banking. Fintech incorporates artificial intelligence to enhance the ease of financial transactions, provide better services, serve a wider clientele base, and maximize efficiency.
Here are ways in which fintech companies make our lives easier:
Limited bank visits
In the past, to handle transactions, one had to visit their bank or an ATM machine. At the bank, you would likely have to wait in line for hours before being attended to.
With new technology and mobile banking, it has become easy to authorize these transactions from the comfort of your home on your phone. It is now easy to withdraw and deposit money from your bank to your phone without the hassle of filling out multiple forms, showing ID, and standing in line.
Whether you are a regular user or a tech prodigy, you can accomplish simple tasks such as shopping, paying for bills, subscriptions, and other services online thanks to fintech. With this technology, it is easy to fund your hobbies and lifestyle.
With digital currency, you can pay for anything: from everyday items like groceries to leisure experiences like avatars in games. You can also track your bills, balances, and expenditures without going the extra mile of physically visiting a bank or reading through multiple bank statements.
Reduced transaction fees
For small businesses, saving every cent counts. All startups endeavor to minimize costs, especially in the early years. With mobile banking and platforms such as PayPal, Skrill, and Square, entrepreneurs can save some money in the long run due to reduced transaction costs.
Most of these platforms only charge a fraction of what banks charge in transactions, while other platforms offer free transactions up to a certain limit. Over time, more businesses are beginning to shift to this model.
Equity and opportunities
Fintech companies are bold and open to taking on clients that some financial institutions would not. This includes people with a lower credit score, low income, or no assets.
In doing so, more people can gain access to funding and opportunities for growth that they were otherwise unable to. This form of inclusivity goes a long way in ensuring financial freedom and economic growth in the long term.
Digital currency and growth
With the increased use of blockchain technology, cryptocurrencies are becoming a reliable form of currency that more people are now embracing. From crypto casinos to crypto insurances, the uses of cryptocurrency are as wide as ever. This offers an opportunity for growth in terms of technology and how we view fiat currency. Over time, as more people embrace cryptocurrency, new avenues for growth and business become accessible to us.
Since the onset of the COVID-19 pandemic, more and more people are avoiding cash transactions. This is because it reduces the risk of spreading the virus. Fintech companies offer much-needed solutions in the face of adversity. Additionally, it is safer to walk around with debit and credit cards as opposed to actual cash.
With more users shifting to banking apps, people can get a clearer picture of their expenditures. Therefore, it is easier to make a budget and plan your finances ahead of time with the transparency offered by these apps. With their help, you can pinpoint the areas in which you spend more money and adjust accordingly.
Fintech companies have established a system that enables people to borrow money from financial institutions online. In the past, when one needed a loan, they would have to apply for it at the bank, show assets, and have guarantors. With fintech companies, all these steps are cut out of the process, and one can access financing easily.
Clients can enjoy fast loan processing and consumer-friendly lending terms, such as no collateral requirement and lower interest rates. These loans can serve as a boost for one’s business.
With the help of technology, investors can make better financial decisions and avoid losses.
Users also get access to investment opportunities, such as stock options and forex trading. Fintech simplifies the whole process. Should there be an error or a bad investment call, you can easily get an alert on your phone. Such an alert would enable you to make changes in your investment or withdraw your funds from the account.
Most apps and websites will send you an alert for overdrawn accounts or if there is any suspicious activity in your account. Artificial intelligence helps to reduce the risk of any financial errors or red flags, which is especially helpful for new investors.