The evolution of Fintech (Finacial Technology) has been significantly enhanced the efficiency, convenience, and reach of financial services. These services including from payments, insurance, and lending to capital raising and investment management all have benefited from the boom in the fintech industry.
The purpose behind the financial services is to offer certain essential functions to economies and societies. As the sector is in its infancy and nascent in the digital era, fintech innovation must focus on delivering those functions in a way that better fulfill the needs and interests of customers.
As new and emerging technologies allow more people to access financial services, most transformational opportunities presented by fintech is financial inclusion. Fintech sector can disrupt markets but increasing competition is hard to accomplish. Paypal is a suitable instance for fintech innovation in the payment industry. In 2002, the company made it public but was quickly acquired by eBay and then in 2015, eventually spun off as a separate company. Over the course of its lifetime, PayPal has created its market in the payment world with personal money transfers, often without fees between individuals, and online payments, including the ability to pay with a credit card without identifying the card.
Here’s a look at best fintech innovation trends that make financial services more efficient.
AI- and Machine Learning-Based Advisory
Most fintech firms offer advisory services that have high benchmarks for their clientele, and accompanying fees wouldn’t be worth it while dealing with small amounts of money. However, innovative solutions like Artificial Intelligence has begun disrupting that by integrating compound algorithms and machine learning to build robots that are capable of providing high-quality, timely financial advice without charging high costs.
Expansion Beyond Computers
The fintech industry has expanded beyond computer technology deployed to the back office of banks or trading firms that help include a large variety of technological interventions into personal and commercial finance. Such interventions are aimed at ensuring security, boosting pace, lessening operating expenses and improving margins. They may also be focused on one particular aspect of industry like mobile sites for banking or may attempt to replace established companies – independent online banks.
Alternate Card for Loans
Most of the small businesses find it difficult to access loans from traditional financial institutions, as they are deemed for being less profitable and higher-risk. To ease that complexity, fintech solutions have been implemented by facilitating peer-to-peer lending with lower interest rates and better terms for both parties. Even though the loans are typically in smaller amounts, they satisfy an essential need when lacking funds for small but crucial expenses.
Since financial transactions have always been the element of trust, smart contracts based on blockchain technology can be constructive. With this solution, specific parameters can be coded into a contract, which will then self-execute and make whatever transactions are necessary to conclude the contract without the intervention of either party. Such a system will foster people to do business worldwide without worrying about the enforcement of the terms of their agreements. It will also assist in uncertain business environments as a result of regulations and other factors.