5 Ways FinTech Is Transforming Daily Routines

Although traditional banks are not going anywhere in the near future and more than three-quarters of those surveyed still seek financial support and advice from their main bank, according to Global FinTech Report 2021, they have a serious opponent – FinTech. As stated in the report, Powered by FinTech Solutions flourished during the Black Swan Events of 2020: Digital asset exchanges, payments, savings and other services grew almost 20% year-on-year on average.

The massive switch to digital is not the only driving force. Defenders of AI-driven digital transformation Choose FinTech Solutions due to faster delivery, personalized services, quick query resolution and accessibility. Demand sparked a pickup in overall transaction volume in the fourth quarter of 2020, for the first time after four consecutive years of decline. This trend should stimulate the emergence and development of FinTech Startups seeking to serve customers only.

5 FinTech Solutions Reduce the burden on workers

The emergence of technological solutions has intensified competition in all industries, and financial services are no exception. A decade ago, making a transaction or obtaining a loan was a long and tedious process, where the banks were responsible, not the customers. However, financial technology has shifted the focus to a user, whose comfort, convenience and safety have become one of the top priorities. As technology has matured we have seen more and more FinTech companies serving not only regular users but also businesses.

As a result, financial management has become simple and accessible like never before. Here are the top five solutions that make our lives easier:

1. Financial management tools

Financial management is the backbone of prosperity. But calculating assets and liabilities manually can often take too much time and effort. Not to mention the human factor which can lead to duplication or discrepancies. All of these processes take a lot of time which can be spent on much more important tasks, and you are not assured of good or precise results.

The stakes are not as high for personal financial management compared to company resources. When it comes to businesses, not only can they face problems with legal offices, but also have their Commercial operations disturbed.

This is where FinTech comes in and does all the hard work. Financial management applications are responsible for tracking and analyzing income and expenses. Some even provide valuable information on budget optimization or tailored loan offers.

Businesses of all walks of life often automate accounting to minimize manual data entry and analysis, identification of transaction patterns, and expense categorization. The task is delegated to RPA (Robotic Process Automation) software which helps to increase productivity.

2. FinTech Cards

While banks are still hesitant to embrace technology and become flexible for customer convenience, FinTech is not. One of the main FinTech innovations are brand new cards that offer a better cash back program or make loan approval easier.

FinTech cards are created at the intersection of banking and technology, the former being responsible for the financial side, while the latter – personalized offers. These cards offer the same banking services as you

Timothy Partasevitch, Director of Growth at Smart IT

normally receives when issuing a credit / debit card at a traditional bank, but with better terms.

While the majority of products focus only on financial benefits, there are some that allow you to transact faster. For example, Chime Bank cuts fees and sends you the paycheck two days earlier than usual. Aspiration offers a debit card with up to 10% cash back and plants a tree for every purchase in your savings account, helping you reduce your carbon footprint.

3. Electronic payments

Cash is slowly but surely disappearing, paving the way for electronic payments, especially after the COVID-19 pandemic has shaped new spending habits. According to Research and Markets, the transaction value for the global digital payments market has reached $ 5.44 trillion and is expected to grow at a CAGR of 11% through 2026.

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In fact, you no longer need to leave your premises to make your purchases, book tickets or order services. Online payments have become even simpler thanks to the massive adoption of mobile applications. According to PwC, more than half of financial institutions have a mobile application and 18% of respondents are developing one. Banks offer mobile banking FinTech-powered services that allow customers to pay taxes, book flights, pay bills and do many other things in one app. There are also FinTech projects like Paysend or Paysera which facilitate instant transactions at lower cost.

Whether you represent a business or are a single user, these tools help you get more done in less time. In other words, you can cover all your expenses without leaving your home or office, saving you a lot of time.

4. Online loans

While 73% of financial sector executives perceive personal banking services as the most likely to be disrupted by FinTech, according to the PwC As a result, borrowing online has so far seemed unrealistic. Once the online customer verification problem was solved, the world saw the dawn of electronic borrowing.

Banks and FinTech companies have established a mutually beneficial partnership, in which financial institutions turn to technology to assess the creditworthiness of customers. Banks can expand their customer base using alternative data sources to assess a person’s ability to repay loans. As for customers, they benefit from fast processing of applications and user-friendly loan terms, for example, no collateral requirement. Therefore, you can quickly get a loan on platforms like Kiva or Proper to cover your business or personal expenses almost immediately.

5. Insurtech

Insurtech is one of the FinTech trends which will evolve in the near future due to its customer centric approach. Recognizing the power of personalization, major insurance companies began to embrace financial technologies and adapt their offer to current market demand – personalized products.

With the help of AI and machine learning, you can now benefit from predictive pricing, personalized offers and pricing based on your level of risk. This means that if a consumer has a healthy and safe lifestyle, their policy will be cheaper than for those who do not.

For example, a business can get coverage online from Next Insurance. In addition to the fast processing, you can choose from several options regardless of your location and tailor the end product to your needs to achieve maximum benefits.

What drives FinTech forward?

FinTech is maturing and getting more and more advocates leaving traditional banks and insurance companies for personalized offers and fast turnaround time. All this has become possible thanks to the technologies that are fueling the evolution of FinTech:

  1. IA. FinTech and Artificial intelligence are essential. AI software is one of the main engines for detecting fraud and ensuring transaction security. For example, Alipay (an Alibaba payment system) relies on AI software to prevent security risks. In addition, AI technology improves customer support through chatbots, acquisition of target customers based on their behavioral models, data analysis and many more.
  2. ML. Machine learning Usually accompanies AI when processing data for advanced analytics or security. ML algorithms are able to analyze tons of data points in seconds and identify anomalous transaction patterns which are then inspected by AI algorithms. Using ML powered predictive analytics, Mastercard was able to reduce declined card transactions by 50%.
  3. Big Data. FinTech was founded on different types of data, including transactional records, user habits and preferences. As leading-edge financial solutions analyze this data, they can deliver a unique offering that drives user flows. Businesses can now harness the power of big data and make informed decisions about new products, services or offerings.
  4. IoT. Internet of things acts as a mobile point of sale system and cybersecurity tool that securely processes and encrypts payment information. For example, Kontakt.io provides low power Bluetooth beacons for mobile payments. They replace traditional point-of-sale technology by streamlining and speeding up the purchasing process, as well as generating valuable data for the business.

Although there may be other pilots like blockchain Technology, those discussed above are key FinTech boosters. However, not all are equally important. Nothing compares to the power of machine learning to personalize anything and everything, from analyzing credit score factors to user spending habits. AI-based insights collected from non-human interactions via chatbots also allow companies to tailor their offerings and establish a better connection with users.

This is why the future of FinTech depends on the development and progress of AI and ML. These two technologies combined allow startups to take full advantage of data and achieve a new standard of customer service in the financial industry.

Timothy Partasevitch, Director of Growth at Intelligent computing.

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