“ Fintech ” the word making buzz these days!! So, why have we become so inquisitive about this word, just because it’s in fashion or because it has much more interesting meaning than it appears!
While the Oxford Dictionary defines Fintech as “Computer programs and other technology used to support or enable banking and financial services”. However, to make it relevant in today’s world the definition has been modified and it means the technology and innovation used in performing financial services. It provides technical support to financial services so that it becomes more accessible and user-friendly to the people.
What Fintech really is?
It is a huge industry consisting of multiple sub industries from different sectors. And to construct itself requires traditional financial services, innovation, techno freak personnel, capital, electronically knitted environment, collaboration and supportive administrative power. The sub industries include- peer to peer lending, asset management, payment management, data collection, digital currency, cyber security, credit scoring and many more.
What Fintech is doing?
Now lets us try to understand how it works. Traditionally the financial market was dominated by the banks with tedious procedures and huge costs. It merges technology with finance and tries to provide speedy and low cost transaction in an innovative mechanism.
We can also say that it’s a moving mechanism where different sections of financial sector and technology try to interconnect with each other. This includes the big players such as banks and financial institutions who have been enjoying their monopoly in the financial system.
The technology innovators who are trying to provide the basic financial services with least cost such as peer to peer lending, payment systems, digital money etc. And not to forget to mention- the startups! who chose a particular type of financial service and works on it to provide in a cheaper and user-friendly manner. So, this conglomeration of different sectors lead to a road called “Fintech”.
Fintech has brought innovation in various traditional sectors of the financial system and has also invented some new processes. For instance,
- Money Transfer: the brokers favorite as it used to fetch them huge brokerage amount and making it tuff for the parties to transfer money. But now companies such as Paypal and Kantox have come up which provide easy transfer and investment options at competitive rates.
- Equity lending: The global financial crisis made it difficult for everyone to do lending business. But thanks to the innovation brought in the sector companies such as Ketto.
- Mobile payments: Companies such as Paytm and Mobikwik have swept the market by giving the money transaction and transfer in the hands of the public.
Hence we can say that the word “Fintech” has turned out to be synonymous with efficiency, innovation and convenience.
Next Part on Fintech to be out soon follow us.