Virtual reality, augmented reality, machine learning, artificial intelligence, etc.
All of these are buzzwords rocking various industries to the core, but the one that seems to be disrupting a stubborn industry, so to speak, is Fintech.
Simply an aggregation of the words ‘finance’ and ‘technology,’ fintech has come to transform the way consumers see, interact with and think about their money.
Leaving the sentiments for later, we explore some hard fintech facts about the influence of fintech on the banking and finance sector:
1. Customer Relations
Traditional banks only offer customer support when they are open. In other words, they are only available to take complaints during the working days of a week, and during working hours too. Anything beyond that and the customer will have to wait till the next opening time.
This is not suitable for many, and fintech sees that as a problem to be tackled.
Fintech fact no. 1- t
2. Structured Services
Honestly, fintech enjoys coming late to the party under this point.
Having been observing in the background, this emerging industry has seen what the banks offer, and what they do not offer. They, thus, started taking the fight to the banks by promising to not only offer better of what these banks had in store but also providing value by offering what the banks won’t consider.
That is why we have seen various peer-to-peer lending platforms which allow customers secure instant loans, funding and financing. This is especially great for those with low credit scores that banks would not even attend to in the first place.
There are also investment plans tailored to the client’s income base, earnings and net worth. This beats rigid plans by banks which tends to put people into brackets rather than offer specialized services.
3. Fraud Detection
Dedicated government agencies and the banking institutions have been clamping down on fraudulent financial transactions for a long time now. The result of that? Losses of billions of dollars yearly to these frauds anyway.
To be fair, these banking institutions employ software to a large degree. The major flaw is that they have to rely on human intelligence too, making the process slow enough that many of these transactions go through before they are nipped in the bud at all.
Fintech start-ups combine artificial intelligence with machine learning in ways that have never been seen before to change this narrative. These algorithms work overtime in real-time, tracking transactions based on current pretext and history.
Pulling from a large array of memory data, the algorithm is also better equipped with the ‘knowledge,’ so to speak, of sensing the most delicate of these fraudulent attempts.
If for no other reason, this makes a consideration of fintech easy to make.
Besides the already mentioned improvement in customer care, fintech brings even more convenience to other parts of the customer’s life.
For one, user savings have been greatly improved by these apps and platforms. By committing to a preferred saving plan, the user could be on auto-save for the rest of their lives, earning interests that compound to make a solid pile after a while.
Likewise, making deposits, transacting without the need for physical cash and handling many banking tasks without having to enter a physical bank location makes all the sense. That, and we have not mentioned the ease of making international payments, among other things.
5. Control and Anonymity
Traditional banks have a habit of taking your money and acting like they have all the control over it, which can get frustrating at some points. There is also almost no way to open a bank account without releasing a ton of personally-identifying details, which makes it almost impossible to have nothing tracking back to you in some instances.
With options like cryptocurrency on the market, these are not problems you have to deal with anymore.
You are basically running your own bank where you have all the power over your money. You don’t even have to worry about releasing your name and other personal data when running transactions if you don’t want to.
With a highly decentralized, anonymous system at your disposal, customers have just about all the control you could want over your money.
Remember the convenience we mentioned above? That is only buttressed by the impressive and highly attractive rates that fintech platforms offer.
From significantly higher savings interest rates to low lending rates, there is no way customers will resist the urge to get into business with them.
Banks, on the other hand, are being increasingly rigid to this change, much to the benefit of the fintech platforms.
Challenges to Be Solved
For all that has been said of fintech facts , there are a couple of concerns around it.
Some of the start-ups out there are pretty much unknown, making it hard for people to trust their money to them. On the other hand, banks have an established presence and say in the market.
As we have already started seeing, the best thing for proper forward momentum will be having banks throw their weight behind these start-ups. This ensures consumers have the best of both worlds – and they can trust what they are putting their monies into too.
Speaking of trust, the fact that fintech leverages the internet to work means that they will be prone to internet attacks and data breaches too. This ranges from man in the middle attacks to phishing and outright brute force attempts.
Among other things, subscribers to the fintech scene should always keep high safety profiles. This means all of setting strong passwords, encrypting connections before connecting to online accounts, enabling two-factor authentication and observing accounts for suspicious activity.
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