The Impact of Fintech on Banks

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The Impact of Fintech on Banks

Sarah Dawson, CFO Tech Outlook | Wednesday, March 17, 2021

The demand for fintech is increasing among businesses and banking customers as they are dependent on technology to help them navigate through their financial problems. 

FREMONT, CA: Fintech defines the term financial technology. Any technology used to enhance, streamline, digitize, or disrupt conventional financial services is referred to as fintech.

Fintech refers to software, algorithms, and applications for computer and mobile-based tools. In some situations, it also includes hardware, such as smart, connected piggy banks or virtual reality (VR) trading platforms. Depositing checks, transferring money, paying bills, and applying for financial assistance are possible with fintech platforms. They also cover more technical concepts such as peer-to-peer lending and cryptocurrency exchanges.

Banks use fintech for both back-end procedures, such as tracking account activity, and consumer-facing solutions, such as the app people use to check the balance. Fintech is used by individuals for almost everything, starting with tax calculations to market speculation, and it does not require any previous investment experience.

Top 10 Fintech Solution Companies - 2020Businesses use fintech for payment processing, e-commerce purchases, accounting, and, more recently, government aid services such as the Payroll Protection Program (PPP). Following the COVID-19 pandemic, an increasing number of businesses turn to fintech to enable features such as contactless payments and other tech-based transactions.

How Does Fintech Affect People?

The financial services industry isn't usually associated with agility. But due to the current situation, customers and business owners expect and require adaptability and rapid iteration (not to mention immediate gratification).

Fintech helps to speed up procedures like obtaining a credit report or sending a foreign money transfer that takes days, weeks, or even months. Platforms like Upstart and TransferWise can complete these tasks in a fraction of the time. Fintech has created the potential to speed up typically time-consuming procedures such as allocating economic stimulus funds. Fintech could increase financial inclusion in certain parts of the world, where there is a lack of governmental or institutional support.

As fintech is developed on ones and zeros versus human abilities and opinions, it can streamline traditionally inefficient procedures. Even though several fintech systems incorporate conventional brokers/advisors and algorithms, others help people in navigating financially complex tasks without communicating with any other human.

See also: Top AR/VR Tech Solution Companies

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