Fintech is an acronym for “financial technology”. It's a general term for any technology used to augment, optimize, digitize, or disrupt traditional financial services. Fintech, an acronym for financial technology, is the application of new technological advances to the products and services of the financial industry. Our guide will explain what it is and how it is used.
FinTech (financial technology) is a general term that refers to software, mobile applications and other technologies created to improve and automate traditional forms of financing for businesses and consumers alike. FinTech can include everything from simple mobile payment applications to complex blockchain networks that host encrypted transactions. Fintech is also a great adapter of automated customer service technology, which uses chatbots and AI interfaces to help customers with basic tasks and also keep staff costs down. While that fintech segment may be the one that receives the most headlines, the big money is still in the traditional global banking industry and its multi-billion dollar market capitalization.
As with many emerging technology sectors, financial technology can be an ambiguous concept due to the wide variety of tools, platforms and services that fall under its enormous umbrella. No one knows for sure what fintech innovations are coming, and this uncertainty is exacerbated by the chaos caused by the pandemic. In addition, according to some predictions, there will be further development of AI (artificial intelligence) technology both on the consumer side and on the back-end of fintech. Over the years, fintech companies have grown and changed in response to developments within the broader technology sector.
In 1998, PayPal was founded, representing one of the first fintech companies to operate primarily on the Internet, a breakthrough that has been further revolutionized by mobile technology, social media and data encryption. Programmers and software developers are primarily responsible for creating and maintaining these fintech sites and applications, designing them to be safe, efficient and navigable. The massive growth of fintech companies and markets globally has led to increased exposure of vulnerabilities in fintech infrastructure, while making it a target of attacks by cybercriminals. Therefore, aspiring fintech professionals can benefit from a working knowledge of cybersecurity, studying how it is used to protect fintech companies from hackers and other cyber threats.
From mobile payment applications like Square (SQ) - Get Block Inc Class A Report to insurance and investment companies, financial technology has disrupted traditional financial and banking industries, potentially posing a threat to traditional banks or traditional financial institutions. Insurance is adopting technology somewhat slowly, and many financial technology start-ups are partnering with traditional insurance companies to help automate processes and expand coverage. Although the industry evokes images of startups and industry-changing technology, traditional companies and banks are also constantly adopting fintech services for their own purposes.