By instituting innovations, Fintech has taken a step towards innovation in the present century.

Over the years, the financial institutions have leveraged technology to advance the operations, enhance customer services, and expand the horizon of opportunities that the technology provides. However, some of the innovations that have been introduced under Fintech, has completely reformed the industry, and has been observed as the stepping stone for industrial revolution 4.0.

Financial Technology (Fintech), is used by businesses and organizations, for improving and automating the delivering of services, offered by financial institutes. Fintech utilizes algorithms and software, for managing financial operations, and offering more customer-oriented services.

Hence Industry Wired presents the best Fintech innovations that have reformed the financial institutions.

Blockchain

Ever since the emergence of Bitcoin, the popularity of Blockchain has been gaining momentum. Termed as the “Distributed Digital Ledger” by the Fintech influencers, the Blockchain maintains data and information over a network of computers, which can be accessed and maintained from anywhere around the world. Unlike the traditional financial system in banks, the Blockchain consists of blocks encrypted with the information of transactions.

One of the unique feature of Blockchain is that, it is decentralised, meaning that the transactions is public and doesn’t provide scope for modification and alteration. Also, the data of the transaction by every customer is maintained in a particular block, which uses the immutable cryptographic signature of the user known as hash.  This block after the completion of the transaction is added to the chain of encryption, where every block refers to the previous block, thus creating a distributed pattern.

The scope of Blockchain is not only limited in financial sector, but it has been utilized in politics, and charity as well, for mitigating the incidents of fraud and misuse of funds. As it can be scrutinized publically, it instills transparency and faith amongst donors. Banks like JP Morgan are already deploying Blockchain for an advanced financial solution, instead of traditional currency.

Digital Wallet

Another innovation that has rendered the global transformation is the use of Digital Wallet. A digital wallet (e-wallet) utilizes a software-based system that stores and maintains payment information and passwords of users, once the transaction process is initiated. The user can use the same digital wallet for storing funds, making transactions, and tracking payment histories. The users can use  mobile applications for accessing the digital wallet. By integrating the digital wallet with their bank accounts, the customers are offered cashless payment. Also, as the transaction history is maintained between both the parties, the incidents of fraud become minimal.

With technologies like Google pay and Paypal, the users can easily track down their transactions. For organizations, especially those prioritizing customer behaviours, the digital wallet provides an insight regarding the type of products purchased by customers on a regular basis. This helps them in chalking out a strategy for scaling the market process.

Digital Banking

In 2018,  the IMF leader Christine Lagarde, displayed her inclination for digitising the existing banking system, so that better customer services can be provided and efficient operations can be maintained. She emphasised, that with the changing nature of money and the Fintech revolution, Digitising bank activities is imperative.

The digital banking involves digitising all the bank activities such as  money deposists, withdrawals, and transfers, checking /saving account management, applying for financial products, loan management, bill payment and account services. This can easily be done by using mobile application.

As per the report by Deloitte titled “2019 Banking and Capital Markets Outlook”, 28% of the banks cite that creating a digital capability is the primary focus of the banks, and 50% of the customers observe that banks are deploying digital banking as the top priority.