Technology in Finance- Fintech & its Innovations

Fintech is evolving tremendously, its growth starts from 2012 at 4 billion USD to 135.7 billion USD by the end of 2019. Businesses believe that this revolutionary technology would bring a drastic change in the financial sector so they are giving more space to fintech in their systems. Businesses are pledging a huge amount of money for fintech to manage financial demands. Fintech is an emerging sector and giving birth to new possibilities. Let’s dig deep into this revolutionary technology and explore the potential it holds for shaping the future.

Fintech- A Great Disruptor

Fintech is a term coined by using two words “finance” and “technology”. It refers to innovations in the financial world driven by technology. Any company which provides enhanced digital financial services to its customers comes under the umbrella of fintech.

Fintech is shifting the perspective of finance from manual to automation. Fintech is utilized by companies to optimize workflow management, financial services, and so on. At first, fintech was held as a back-end system only for banks but now it has enlarged its network, focusing more on consumer-based applications. Fintech gives access to people for various financial services by ease-of-use technology.

Fintech & Its Many Innovations

Fintech is uncovering many innovations in this digital world. It is bringing into light many technological solutions that can provide enhanced customer experience along with better business practices. Known for its potentiality, fintech is being deployed in many sectors for different purposes. Some of the fintech innovations are discussed below:

• Blockchain

This is one of the fastest-growing fintech applications reaching its heights with its parent technology- Bitcoin and Cryptocurrency. Blockchain is leading the digital era of finance. Basically, Blockchain is a Distributed Ledger Technology (DLT) to store transactions on networks. Blockchain has set a trademark in securing transactions which are impossible to tamper. Investors are pouring billions of dollars into its market.

• InsurTech and RegTech

The oldest sector in the world which lacks innovation and technology is Insurance. To disrupt this, InsurTech (Insurance Technology) is introduced with fintech. InsurTech is to strike out the good old methods of the insurance industry with innovative technology. InsurTech startups use AI (Artificial Intelligence) and deep learning (a subset of machine learning) to optimize the policies for an individual and for better model building. Insurance is a highly regulated sector in finance with many laws and acts so RegTech (Regulation Technology) has provided a backbone for InsurTech.

Regtech is a technology-driven regulatory processing management system, built using SaaS (software-as-a-service) to help businesses in structuring a regulatory system. With the help of RegTech, online transactions are totally secured. In addition, it detects anomalies in real-time to halt fraudulent activities in a digitalized environment.

• Online-Banking

Online-Banking or open-Banking make use of Application Programming Interfaces (APIs) to provide third-party access to customer’s banking and other financial data. Third-party organizations build banking or other financial applications for customers by using this data to experience digital money management. People can explore features like expense monitoring, digital wallet, and easy peer-to-peer transactions by open-banking.