The term ‘fintech’ refers to technology created specifically for, and used within, the finance sector. This could be anything from a simple payment app, to more advanced automated systems used to provide security around your bank account.
As technology increasingly finds more uses right across society, it has also dramatically changed the way the finance industry operates today. Here are 5 ways Fintech is disrupting the finance industry and enhancing the way we interact with our money.
As artificial intelligence (AI) software becomes cheaper, it also becomes more accessible and is already being used widely right across the finance sector. Amongst other things, AI can be employed to help detect fraud to protect customer’s money and the assets of financial institutions.
It also proving to be particularly useful when it comes to assessing credit applications, as it can quickly read historical data to assess whether the individual will repay in the future without any issue. From granting short-term loans to assessing mortgage requests, artificial intelligence will cut down the decision-making process while making it much more accurate.
Use of chatbots
Chatbots are everywhere – so much so that even if you think you haven’t engaged with one, you probably already have. They are pieces of software that rely on machine learning to improve their language as they engage with humans in conversation. Banks and financial organisations use these to deal with general enquiries before directing customers to specific departments. It’s a much more cost-effective option for businesses as well as ensuring customer’s needs are attended to efficiently.
Online and open banking
For decades bank branches were the only way to access and manage your money. Many banks and building societies are closing their physical outlets are more people use online portals, or financial organisations that exist online only. It offers much more convenience for customers who can see their funds anywhere and at any time, while for banks it reduces the costly overheads that come with sustaining high street branches.
New cryptocurrencies have shaken up the financial world as it enables users to move and use their money much faster and with less expense involved. According to multinational auditors, PriceWaterHouseCoopers, almost 77% of those working in financial services intend to adopt blockchain within the next 12 months. Not only does it reduce costs for users, but transactions can also be audited much more accurately. In turn, this means there will be less risk involved for stock exchange traders and also reduce the likelihood of costly human errors.
Almost everyone has a smartphone of some kind today, which has led to the creation of multiple payment apps. These are now attached to major banking systems which allow people to shop and pay online, make investments and transfer money to wherever they need. This has meant that instead of shopping offline using physical cards, more and more people feel secure to buy clothes, food, furniture and anything else they need online.