According to EY’s Fintech Adoption Index, a third of consumers worldwide are using two or more financial technology services, with 84% of customers saying they are aware of financial technology (up 22% from the previous year).
In fact. FinTech products and services are faster, more efficient and cost-effective, and enabling a larger number of individuals to access and benefit from financial services. you could visit this article to know more about fintech KPIs.
What is Financial Technology?
Financial Technology (FinTech) is a new financial industry that applies technology to improve financial activities. it is the new applications, processes, products, or business models in the financial service industry. These applications and products are composed of one or more complementary financial services and are provided as an end-to-end process via the Internet.
FinTech describes a business that aims at providing financial services by making use of software and modern technology. it aims to compete with traditional financial methods in the delivery of financial services.
What is FinTech used for?
• Instant money transfers:
People now are able to transfer money without going to financial institutions. With a password and few clicks, you can transfer your money to whoever you want.
Fintech is changing the world of finance for consumers in a myriad of ways. For example, you can now open a bank account over the internet, without physically visiting a bank. You can link the account to your smartphone and use it to monitor your transactions. You can even turn your smartphone into a digital wallet and use it to pay for things using money in your account.
You can do the shopping while you are at home. FinTech enables the customer to browse and buy products through the internet.
Who uses FinTech?
Trends toward mobile banking, increased information, data, and more accurate analytics and decentralization of access will create opportunities to interact in unprecedented ways.
1) Banks and their customers:
Banks provide online banking services which decrease the dependency on financial institutions.
2) Financial Technology companies:
They consist of both startups and established FinTech companies trying to replace or enhance the usage of financial services provided by existing financial companies.
The advantages of fintech
- Speed and convenience
Fintech products tend to be delivered online and so are easier and quicker for consumers to access.
- Greater choice
Consumers benefit from a greater choice of products and services because they can be bought remotely, regardless of location.
- Cheaper deals
Fintech companies may not need to invest money in physical infrastructure like a branch network so may be able to offer cheaper deals to consumers.
- More personalized products
Technology allows fintech companies to collect and store more information on customers so they may be able to offer consumers more personalized products or services.
The disadvantages of fintech
- Unclear rights
Fintech companies may be new to the financial industry and use different business models to traditional providers. This can make it harder to ascertain which ones are regulated, and what your rights are if something goes wrong.
- Making a rash decision
Financial products that are bought instantly online without ever meeting anyone face-to-face may make it easier for consumers to make quick, uninformed decisions.
- Technology-based risks
Financial products bought online may leave you more exposed to technology-based risks. For example, your personal data could be misused or you could fall victim to cybercrime.
- Financial exclusion
While technology increases choice and access for most consumers, it can exclude those who don’t know how to use the internet or devices like computers, smartphones, and tablets.