At present, Banking, Finance and Technology go hand in hand. The mobile applications in use today are sponsored by technology and can be used for handling accounts and finances. This has led to the emergence of a new term called FinTech, an abbreviation for Financial Technology.
The term FinTech includes a huge range of products, technologies and business models that are changing the financial services industry. It is an emerging technology that seeks to enhance and automate the conveyance and utilization of money related administrations. Financial technology has filled a void for people around the globe who do not have access to traditional banking facilities. About 1.7 Billion people worldwide don’t have bank accounts. Thanks to FinTech, you now only need your phone for services like loans and insurance. Global investments in the FinTech sector has added up to nearly $100 Billion since 2010.
We have come to an understanding that finance can be managed the best with the use of best technology so that money multiplies at the speed of technological improvements. However, the issue with technology is that it gets obsolete quickly and thus, in order to continue multiplying the money, one must implement the best accessible technology available in to our financial investments.
“Time had come to integrate finance into technology instead of technology into finance, emergence of Bitcoin is just the start” says Sidharth Sogani, Founder of CREBACO Global Inc.
The most recent of all technologies with respect to the idea of FinTech is Blockchain, which was discovered inadvertently as it is the fundamental technology for Bitcoin. Blockchain is the most expedient gizmo because all the transactions have trusted track records. The widespread of blockchain in the finance industry results in the self-control of the budgetary framework and the best alternative for the further advancement. This makes the technology a vital instrument in building trust amongst businesses and customers.
Despite the fact that Bitcoin is anti banking and isn’t useful for the banking sector, however at some point or another this innovation will turn into a key factor in the future investment systems and consequently cryptocurrencies must be utilized so as to oversee and manage the finances.
There are developing portfolio management organisations which manage only digital assets like cryptocurrencies. There are a few organisations which empower investors to invest into several different products in different nations by taking investments in digital coins which implies that the investors put in their resources in Bitcoin however they can purchase Silver or Apple stock in the US by simply sitting in Africa.
Ripple, the token XRP, has enabled many banks to leapfrog the older systems like SWIFT-making the banking system a lot quicker and cross border transactions in less than 6 seconds.
However, like any other growing industry, FinTech does not come without risks either. After all, it threatens to disrupt already established financial infrastructures, which means there is a requirement for an administrative system that secures existing conditions. A few drawbacks of FinTech is that it has stringent regulations which means the FinTech industry doesn’t know exactly which regulators and governing bodies they have to adhere to. Another disadvantage is that the term may seem to be flashy and exciting, but most people fail to understand what it actually is and does. This might create misunderstandings regarding the idea of FinTech all together.
FinTech industry moves lightning fast, which is another disadvantage because it includes fast decision making and is tough to keep up with.
FinTech advancements will enable greater access to the financial system for unbanked people. Blockchain is broadly foreseen to be the most recent in a line of FinTech advancements to reshape the future of our economies and business ecosystems.