The word FinTech is a portmanteau formed by combining the words "financial" and "technology." FinTech represents finance startups that are created technologically to assist niche markets such as online money transfer, mobile payments, etc.
The upward trajectory of FinTech is pushing high-end street banks to reconsider the way they interact with their customers. Over the past handful of years, a crop of FinTech startups, with the help of technology, has transformed the way we invest, make payments, or even get a loan. It is because usually FinTech firms are backed up by financial institutions, banks, insurance agencies, etc.
The emergence of great technology has changed every industry right from the operation level to its structure, creating new challenges, and bringing unseen opportunities. According to a report, It is estimated that by 2019 nearly two billion people would be using mobile banking to track their spending, transferring money, budgeting, and trade.
Here are four ways that show us how technology has transformed the finance industry.
1. It’s All Virtual Now
Gone are the days when banks and financial institutions secured every little piece of their physical data like guarding servers and material documents filled with personal and sensitive data. Now, banks have computerized tellers, e-payments, digital records, and much more. All this secured data can be sent to any corner of the world with just a click of the button.
2. Need for IT in the Industry
IT in the financial services industry is just as essential as any other. The need of IT especially mobile app development in the financial industry is increasing day by day. The mobile apps are quickly becoming the biggest asset in the finance industry with the increase in usage of mobile banking & net banking. This especially applies to those firms who largely deal with cloud data. Such firms do need big IT team to handle huge amounts of customers data and stay updated with the technology. So having an agile IT team is extremely crucial to any financial institution’s success in this technology-driven competitive world.
3. Everything Is Global
Thanks to technology. Now, banks can operate around the globe. They can share any kind of information anywhere, anytime. Lately, as new financial startups have emerged, they can conduct their business globally. As more and more new players are entering the market, the need for IT also increases as more and more firms make the transition to the cloud.
4. Data Encryption
Eavesdroppers are everywhere. Because of this security has become the biggest concern for financial firms. Earlier, before technology took over, only people in server room used to be worried about security issues. Now, things are completely different. The vulnerability greatly exists as huge amounts of sensitive data is stored in the cloud which can be easily shared or hacked. Financial firms have strengthened the IT team and security procedures as they have to ensure their security is strong enough to thwart the hackers’ efforts.
FinTech apps like Unsplurge, Spendee, etc. have also changed the way we manage our money and interact with our finances. Looking ahead from now, the technology-driven finance industry looks set to continue its growth, bringing some additional transparency to the industry.