One of the common buzzwords that seem to have taken over the banking industry off late is Fintech. The word simply refers to using technology in all aspects of financial servicing and its functions. It is mainly seen as the replacement to all paper-driven tasks and processes, which take up a significant chunk of the banking industry.
Fintech was initially used for office functions with software used to control and manage transactions, handle personal accounts, manage databases and more. Today, however, fintech has completely transformed and changed the way banks operate. Fintech has become a vital part of customer-facing processes with every digital transaction, now available on the customer's fingertips. Be it stock investments, transferring money, shopping, forex or even opening a bank account, FinTech is at the forefront of it all.
Here are a few ways fintech is transforming financial services in a huge manner:
Chatbots are software which have been coded to apply machine learning and natural language processing techniques to learn from interactions with humans. It has become a very popular tool, and banks are using it judiciously for a wide range of customer-facing processes like directing customers to departments or handling simple queries. One of Japan's biggest banks is releasing a chatbot which aids customers to find any relevant information, directly on their website.
Blockchain is seen as the future of banking and as a primary disruptor in the FinTech industry in general. It uses a digital public record of transactions that is decentralised, unchangeable and anonymous. Instead of depending on a bank to maintain a private database of any records, blockchain fintech technology releases all records to the public. The impact it could have is touted as revolutionary and life-changing.
Personal finance was seen as an industry that was wholly controlled by most of the major financial institutions. There are companies, however, that are making it more transparent and affordable. There are online platforms and even cell phone apps which aid businesses develop budgets, file taxes and invest and more. FinTech courses also allows people to track their expenditures on a daily basis and scan through their financial status whenever needed.
There are a wide array of payment technologies which allow individuals to transfer their money via the internet. By simply using smartphones and the NFC tech, payments can be completed in a flash. These services eliminate the need for a debit and credit card and even cash!
Thus, the FinTech industry is here to stay with many innovations looking to change the way individuals bank.