Let’s Romance with Finance using ‘FinTech’

Sunil Raj
Sunil Raj
Oct 13 · 6 min read

Introduction:

Financial Technology, an industry known for championing software and technology in the financial sector that aims to compete with traditional financial methods in the delivery of financial services. The use of smartphones for mobile banking services was more accessible to the general public. FinTech is coming to represent technologies that are disrupting traditional financial services, including mobile payments, money transfers, loans, fundraising, and asset management.

Fintech also includes the development and use of cryptocurrencies such as bitcoin. The big money still lies in the traditional global banking industry and its multi-trillion-dollar market capitalization. Rapid innovation is the key in sectors like lending, financial inclusion, financial advisory, personal finance, security, and digital payments. Fintech companies are more customer-centric than traditional financial companies. Transparency is one of the principal objectives which based their services on disrupting the stranglehold of the traditional ones.

FinTech start-ups and companies are small and agile, able to disrupt the slow magnanimous that are traditional financial institutions and innovate quickly that seeks to improve and automate the delivery and use of financial services

The digital revolution is transforming the way people want to access services and financial products and FinTech meets new digital-driven demands. Nowadays, customers increasingly expect to be able to manage their finances on the go, from applying for a mortgage through a video link or sending global payments using their phone numbers.

Prerequisites:

  • Smart contracts: Utilizes computer programs(blockchain) to automatically execute contracts between buyers and sellers
  • Open banking: It relies on blockchain and postulates that third-parties should have access to bank data to build applications that create a connected network of financial institutions and third-party providers
  • Robo-advisors: Utilizes algorithms to automate investment advice to lower its cost and increase accessibility. They are built to extract user data collected via an online survey and any other relevant source of information, analyze that data and provide financial planning services
  • Unbanked/underbanked: People who don’t have access to proper banking or services offered by retail banks. They might have a banking account but rely largely on alternative methods. The ability to serve the underbanked is considered one of the most important facets of FinTech
  • Crowdfunding Platforms: Companies like Kickstarter, Patreon, GoFundMe, and others allow internet and app users to send or receive money from others on the platform
  • Mobile Payments: It seems as though everyone with a smartphone using increasingly sophisticated technology, services have emerged that allow consumers to exchange money and payments online or on mobile
  • Budgeting Apps: Users can easily and efficiently keep track of their income, expenses and other budgeting tools that have revolutionized the way consumers think about their money
  • Lending: It is a space where the biggest innovations in FinTech are coming from
  • API: It represents the functionalities of a certain program. These are important because they enable other programmers to use components of existing software, allowing for faster and more reliable software development — a major component of the FinTech movement!
  • Cryptocurrency: A digital currency using cryptography for regulation and security. It’s a decentralized system, meaning no central entity exists to oversee the processes. There are several different kinds of cryptocurrency, including Bitcoin, Ethereum, and Ripple
  • Blockchain: Where cryptocurrency transactions get recorded. It operates like a public ledger where information, once entered, can’t be altered. This technology also has several non-cryptocurrency applications including smart contracts and the recording of digital assets
  • Encryption: The process of encoding messages. It is vital to FinTech, the blockchain, and anything else that needs to be secure. Data, like names and numbers, is turned into code using algorithms (mathematical formulas). A key is required to turn that code back into useful data
  • KBA: Knowledge-Based Authentication aids are used for fraud prevention. Consumers probably know this as the “secret question” users must answer before being granted access
  • KYC: It revolves around authenticating users
  • InsurTech: It seeks to use technology to simplify and streamline the insurance industry
  • RegTech: With changes happening so fast, it is hard for many businesses to compete yet still remain within their industry’s regulatory frameworks
  • Artificial Intelligence Software Services: Machine learning technology allows us a feel of AI that’s yet to take its true form through further development. The payments would be much faster, and free of potential human mistakes
  • POS: Point-of-sale is that important step where customer payment information is taken at a physical location when making a purchase. Several popular FinTech start-ups have created apps and services to expedite this process and keep it safe
  • SSO: Single Sign-On authentication saves users from the barrage of IDs and passwords by allowing one set of login credentials to sign in for multiple applications
  • Tokenization: Replaces sensitive data with unique symbols. These “tokens” allow users to retain essential information about their credit cards and transactions without compromising security. It also turns complex information into short, useful codes

Advantages:

  • Cut costs and Improve decision-making
  • Introduce transparency and Enhance Decision Processes
  • Fintech is Adaptable and effective in making Transactions

Disadvantages:

  • Reserve Transfers and Payments
  • Consumer Banking
  • Wealth Management and Investments
  • Business Banking

Applications:

  • Automated Claims Processes and Contract Analyzer
  • Algorithmic Trading, Augmented research tools and Valuation Models
  • Payments, Banking, and Lending
  • Blockchain and Smart contracts

Developer-Take-A-Ways!

Conclusion:

FinTech enterprises come in all shapes and sizes. As our society becomes increasingly digitized, we expect to see physical money eventually phased out, and FinTech simply becomes the norm in financial services. The next few years look to be bright for the FinTech industry. Advances in artificial intelligence and data handling and analytics will drive even more innovation and creativity in the sector in lucrative manner.

I’m going to share a bunch of tools for developers at the Developer Take-A-Ways Section of the story, but feel free to comment, share or send me any other interesting videos or links you might have found. ✌ It’s a massive opportunity to work on. I hope you found this article useful.

If you feel like this story was useful or informative and think others should see it too, make sure you hit the ‘clap’👏 button. See you soon! 👋 Bubyee…

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