Fintech is an abbreviation of financial technology and definitely is the fastest expanding and most exciting technology in current global business.
Though it may sound simple to you, yet its deployment by the finance institutions with other developed online and digital technologies along with its impact and usefulness are quite complex.
In fact, within a short period of time, the new-gen Fintech will impact every transaction of the financial institutions.
Furthermore, it also blurs the line of variation within technology providers, advisors, bankers and business services and serves them with much identical services.
Read on this blog to know how it will play a significant role in the finance industry in the future.
Key drivers of the innovation
A number of factors perform their role when it is about the advancement in Fintech application development.
Some of them are mentioned below for your reference:
- Technological advancements
It has completely changed how persons do everything in their regular lives.
Several technologies like cloud computing, blockchain, AI and IoT are prime drivers of the fintech applications thereby a great assistance of fintech organizations.
- Consumer behavior
The behaviors of the customers especially in Gen Z, Y and X have moved completely and many of the existing financial institutions are still strictly adhering to the traditional ways and not maintaining the pace with the societal change.
However, it allows the new financial players to take over the position in the market and serve to the commoners.
- Lower entry barriers
With the flourishing of the technology financial institutions are forced either to stay as they are or undergo changes.
On the basis of it, it will offer a golden chance to the new challenging start-ups in the financial industry and banking services.
With the help of latest advancements they will target the consumers with various exciting offers, varied behaviors and needs as well.
- Greater information access
With the help of cloud computing, artificial intelligence and analytics companies now will be able to observe the latest trends.
Accordingly, they will improve their service by adjusting it and start offering varied alluring services to the targeted consumers much quicker than ever.
- More investment in finance sector
Nowadays, investment becomes huge in number and continues to expand much more.
With more advancement, millions of investments are going to take place in the future.
A new monetary relationship
Fintech brings the much-needed change in the thinking ability of the people regarding value exchange and money within a real-time.
Now the so-called Cashless (digital world) businesses are spotting up everywhere and allowing the people to give up on the traditional ways of transactions.
Starting from governments to common people, it forces everyone to oblige and get adapted with the new way of digital transactions.
It becomes important for the customers to learn the ways to make payment electronically instead of liquid cash.
Many online shopping apps have taken the initiative of offering an online shopping account.
In this case, customers only have to select the item they want to buy and leave the store.
It will get added automatically to the account.
This concept will recreate the online shopping future and make it more preferable for the consumers.
Another fines example of Fintech app development advancement is money transfer via using Smartwatches or Smartphones.
Already it has been adapted by a number of people starting from youngsters to elderly people.
Much more revolutionary come with the apps with international or national acceptance.
Even they offer sharing of the money within friends and relatives along with splitting up of the bills at the same time.
Such crowdfunding sites are getting much more popularity in contributing, sharing, understanding the situation in just a few touches.
In the emergence of the digital currencies such as bitcoin and record-storing technology called blockchain it is going to be more innovative in the long haul.
Although still not fully integrated with the daily lives of the people yet it changes the way people make payments, borrow and save money along with the management of financial risk.
Fintech improves the financial services much better
Blockchain, AI, cloud computing and IoT are the name of a few advanced technologies that bring the change in the methods of consumer interaction.
Even it has driven the change into the money management ways too at the same time.
Many traditional financial service providers regarded fintech as the disruptor of the industry.
But the players who know the ways to embrace the technology are becoming more successful and reputed in this industry.
All they do is utilizing the benefits of fintech and offer new financial services and products for the customers.
But they are mainly emphasized on proper, efficient and easier money management ways.
- Lending and borrowing money
Now fund access become less centralized and much transparent than ever.
Peer-to-peer lending and crowdfunding facility is used to borrow money from banks in the form of mortgages and loans.
This non-traditional and new technology helps the investors for flourishing and offer loans to those who aren’t qualified for traditional loans via specific resources.
- Financial markets
As established in pre-digital era, finance industry has come across many innovations and disruptions.
But recently fintech has changed the sector completely, no more disruptions are there.
In fact, machine learning and AI (artificial intelligence) enable automated or algorithmic trading in stock exchanges.
Even data is aggregated via network intelligence and connection for predicting possible future occasions.
It assists the person to enjoy the accessibility to such trading facilities which were once only available for corporate investors.
- Asset management
Technologies, analysis tools and data processing contribute a lot to the asset balancing for enhancing the automation.
Moreover, Robo-advisory-enabled as well as cloud-based platforms use algorithms for advising the users regarding asset management and investment.
While there is lightning changes occurrences in the finance sector, certain businesses are still there adhere to the traditional regulatory framework of the industry.
With the help of machine learning and big data, regtech tools regularize the transactions for identifying the outliners with probable fraudulent activities.
So, real time identification of the potential threats, minimize the chances of risks and thus accounting of the data breaches is possible on time.
As fintech app development companies are completely Millennials and Gen X- centric some of the innovators put their focus on the great-grandparents and grandparents who are more vulnerable financially.
Many finance institutions aim for making easy administration for the fragmented procedure to manage the monthly bills of senior citizens.
It will be done so by linking every financial account of the senior citizen with the service so that it can send alerts regarding any strange behavior by learning the person’s habit.
Current consumer markets
Now, via mobile application financial service provider can look for new markets and willing to serve the consumers in those remote areas where the current service has no access.
It will help in providing the accessibility to un-banked or under-banked customers.
Also it allows the fintech companies to target and capitalize on the market of such underserved areas.
Most finance sectors of West already accept the legacy economies.
Whereas, it is the western markets who are quite slower in pace for adopting the new advancements and technologies.
It is so; because banks, businesses and other finance sectors are introduced in the late 1990s and 2000s and thereby at present they are running on profit and other benefits.
But Southern Hemisphere remained under-banked or un-banked for a long period of time and due to the introduction of wallet innovations and mobile payment they are experiencing the change in the financial sector.
Credit goes to telecommunications network that have worked day-and-night to enable digital transaction accessibility on Smartphone.
For this reason, the sales of mobile have been anticipated to billion also at the same time.
Where Fintech will lead the finance sector?
While the advancements are taking place in Fintech at a lightning speed, many experts are digging its surface to find out its potential ability.
This will help in determining how advance the finance sectors will be in the next few years.
No doubt, that it has changed the lifestyle of people and offers easy trading, banking and exchanging money facilities without any physical interaction of humans.
Still, certain challenges are there which need to be overcome by the finance sector especially in the field of data protection and regulatory.
Then only it can own its own space in the market.
As business leaders grab opportunities with the advancements in several technologies like AI, blockchain and big data, Fintech in the business model will help in seeking the attention of future consumers.
Hence, from the above discussion it is clear that Fintech possesses an integral role to play in the finance sectors.
Despite established financial institutions or a new banking start-up all should consider its key role and prefer the use of this application.
It can be done so by making a customized app with the help of Induji Tech fintech developers.
Induji Tech can be your ultimate solution to get a reliable and efficient fintech app.
Contact us today to tell us about your requirements!