Financial Technology, (Fintech), like every other sector, is booming with many revolutionary changes and substantial development. The goal of Fintech companies is to provide their consumers with financial services which are highly efficient. Fintech in abundance has improved the utilization of financial services to its maximum potential by introducing technology that helps consumers in handling their financial activities.
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By innovating new software and algorithms which can easily be used on any digital devices, mainly Android phones, and laptops, it is found that in 2016 alone, consumers have used at least one app out of three to manage their financial operations. This data suggests that the Fintech industry receives good funding from investors who by effect, would gain generous profit. According to the data presented by CNBC, in the year 2017, investments in Fintech have skyrocketed to 17%. The following are a few remarkable innovations in fintech and banking over the last decade:
Development of Mobile Applications for Easy Transfer of Funds which upholds the Feature of no-contact Transaction
Mobile applications have made transferring money from one account to another a simple task by being convenient, accessible, and swift. Just with a few taps on your cell phone, you can transfer your funds in a few seconds. Not only are these mobile applications beneficial for gigantic organizations, but small scale companies have also profited using these effortless applications. Business operations all over the world experienced a dramatic increase in profit by utilizing mobile applications for transferring funds of billions of dollars on a daily basis.
Development of Biometrics to Ensure Secure Financial Transactions
Facial Recognition and Fingerprint Scanning are the most popular Biometrics used by the Fintech Sector, which ensures the security of transactions and personal data. Biometrics in Fintech helps by checking the user’s identity before initiating any transaction which strengthens the security of the transaction, and the user also receives a notification after the transaction is successful. Founder and Chief Executive of iProov, said that “In 2010 there were no Mobile Banking apps- the first appeared in 2012. Today some banks don’t offer any other way”. By using these secure mobile banking apps, there is little chance of fraud and mobile transfers take place in an efficient manner.
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Development of Online Payment Systems and Card Readers to aid small-scale business services
One of the products which have proven to be advantageous for carrying out financial operations is ‘Square’. Square is a user-friendly credit card processing method which allows the user to make card payments anywhere without actually carrying a card. This product is used by just plugging it into the individual’s mobile device. This gives the user a double-advantage by securing the transaction and making card payments easily accessible. Now, the user does not have to worry about misplacing the credit card as it can easily be replaced by Square.
Evolution of Browser Extensions and Online Coupons
Browser extensions are hugely responsible for the customization of the web browser. Browser Extensions like ‘Honey’ scan the web and provide the user with online coupons and promo codes which save dollars while shopping virtually. These browser extensions are then profited by their various partners by earning a commission. According to the available data, in the year 2018, Honey has successfully amassed 8 million users, and in the year 2019, this software module was bought by PayPal for an amount worth $4 billion.
Integration of Blockchain Technology
Virtual Currency like Bitcoin can be produced by using Blockchain Technology. For earning Bitcoins, the user has to complete a few simple tasks like writing a program or solving a puzzle. Later, these Bitcoins can be exchanged for trade or even money which has completely changed the scenario of the financial sector by introducing virtual currency against cash.
Development of Crowdfunding Websites
Crowdfunding websites like Change.org, Kickstarter and Patreon have made pooling of funds for organizations all over the world an easy task. The company who needs funds would upload a petition on any of these crowdfunding platforms, and the investors may send funds to the user directly. This method of transfer of money has completely overtaken the conventional system of applying for loans from the bank. A whopping amount of $34 billion has now been generated by the help of crowdfunding platforms, till date.
Insurance and Fintech
Financial Technology has also made its mark in the insurance sector by innovating technology which aids matters related to insurance may that be home insurance, car insurance or life insurance. According to a data presented by CNBC, Oscar Health, an insurance start-up, has amassed amount worth $165 billion in funding.
Thus, we can see that in the past decade, financial services technologies have grown leaps and bounds and have revolutionized the way people think about business and money. The trend is expected to continue in future and completely transform the way the financial sector operates.
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