Fintech, that term that is a hybrid of financial services and technology, is rising up to transform the way of how we think about and use money. As a financial services sector that emerged earlier this century, it originally was concerned new technology that was utilized to the back end operations of established financial institutions. More recently, the term has acquired a more general definition as impacting any technological advance in financial services including retail banking, business and consumer loans, and cryptocurrencies such as Bitcoin.
A Panorama of Users
Fintech is already used on a variety of levels by small businesses, banks, bank customers, and general consumers. Advances in mobile banking and data security are a catalyst to further development of fintech solutions for these groups. Another catalyst of fintech is the growing distrust and disappointment in the inadequacy or lack of established banks’ financial services.
Consumers are continuing to embrace the new reality of technology enhanced banking and commerce. Along with the interconnectivity of information and communication on the internet, people have expanded their comfort zone with computing to include financial applications.
You Are Already There
Financial technology has come into its own since the dot.com days on through to the mobile internet application explosion of today. To embrace the use of fintech means to use any financial app or online financial service. What was in the back room of stock trading houses and banks now is being applied to personal and commercial finance applications. Today, an overwhelming majority of financial activity is impacted by some aspect of fintech.
Mobile Applications Dominate
The way banking was conducted just ten to twenty years ago seems like ancient history when viewed through the lens of fintech capabilities. The mobile applications field will continue to expand with innovations like Apple’s digital wallet and Google’s mobile wallet systems.
New Tech in the Back End
Fintech started in back end operations of financial services and will continue to influence it into the future. Innovations in data storage and analytics will bring new levels of customer information to light that will open up cross sell opportunities within banking institutions and open up new possibilities for the innovation of financial services. Data storage is relatively inexpensive now, and cloud based server abilities make relatively short work of data analysis.
The inventor of the Bitcoin system invented a whole new way of recording transactions as well as the famous digital currency. It is called a Blockchain, and it could be a total game changer in the fintech field. It integrates information regarding the date of the transaction and the network it was made on. The blocks of transactions form a chain that is linked chronologically. When developed further, this technology could speed up money transfers, grant more online privacy, and solve the present royalty conundrums for musicians.
Once relegated to a limited part of the financial services industry, fintech is now at the defining edge of how and where consumers as well as business interests spend and save money. Look for future growth in financial services to be led by fintech.