Fintech or Financial Technology refers to the use of digital technology to develop innovative products and services. It is assumed to be the modern movement in the banking industry. And, it is being used to help companies, consumers, and business owners to manage all aspects of financial operations and processes. Moreover, the global investments in Fintech technology and related ventures have increased to an insane amount of $112 billion.
Firstly introduced as a technology that can be used in the back-end systems of banks or other financial institutions has now changed its definition. Today, its application is much more consumer-based than ever before. It has made stock trading, insurance payment, and managing funds possible online.
Read: The Future of Banking with the Growth of Technology
Not only that but Fintech also incorporates the expansion and use of cryptocurrencies. Although this part of Fintech usually stays online, the multi dollars market capitalization still lies in the traditional banking industry. Continuous partnership and collaboration among banks and fintech companies are crucial for the benefit of the financial services industry.
In today’s era when almost every industry is moving to digital transformation, customers are not ready to go for services offered in the traditional banking industry. Instead, they want services that are fast yet safe.
So how can we exempt the power of fintech in Banking? Let’s check it out!
How Fintech In Banking Is Advancing?
Here is the list of some financial technologies that are set to advance banking.
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Omni Channel & Branchless Bank
Fintech is converting the entire banking system from being branch-specific to becoming digital channels. It eliminates the function dependency on brick and mortar branches. In return, it increases the adoption of omnichannel banking.
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Artificial Intelligence
AI has become an important part of banking services. It helps in detecting fraud and generates alerts whenever a potentially fraudulent transaction is taking place. With the integration of data aggregation platforms, machine learning-based statistical modeling, and process automation processes can become highly efficient. How Does AI Fit into Analytics?
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Chatbots
Chatbots are made up of machine learning and natural language processing software that enables them to learn from regular human interactions. They are highly efficient as they can easily handle customer queries and direct them to the right departments for further assistance. With its integration in banking, banks can amplify customer satisfaction while providing services on time.
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E-Wallets
The tremendous increase in E-wallets is yet another indicator for the inclusion of fintech services. Apple Pay, PayTM, PayPal, and Samsung Pay are some of the major e-wallet companies that are being used to complete P2P payments, booking tickets, paying bills, etc. It has highly impacted the users by providing tempting offers and cashback. Due to which several banks have recognized its importance and want to embrace its advancements.
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Mobile Banking
With the increase in the use of smartphones, banks have been involuntarily developing mobile banking applications to offer convenient services. Some of the banking apps include fingerprint sensors to recognize the user and offer high security. Moreover, it gives quick access to funds and helps users to swiftly deposit checks, pay bills, check account balance, and so do so much more.
Read: Core Banking Software Development
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Blockchain
Blockchain technology is an open and distributed ledger used to record transactions between two parties securely which cannot be modified by anyone except the customer. By establishing blockchain technology in banking, banks can facilitate faster transactions at lower processing fees while offering unbreakable security. Moreover, it will cut down third-party verification and processing time for transactions to take place.
APIs have become the central dynamic of the financial industry. They are all about agility, speed, and personalization which makes financial institutions plan to invest and deploy APIs for more reliable banking facilities.
Advantages of Fintech In Banking
The benefits of Fintech in banking go beyond just revenue. Some of the additional benefits banks can acquire from their fintech collaboration concludes:
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Providing More Functions To Customers
Functions like mobile check deposits or money management tools which were not available in the past will be offered to the customers with the collaboration of banking and fintech.
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Ease of Use
When banks and fintech companies work together, with the vast knowledge of techs and user experience, they can provide users a program that is not only automatic but also easy to use making digital banking user-friendly.
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Reduced Cost
Rather than trying to advance the banking technology on its own, if banks work along with fintech companies it can reduce the overall costing of improving the digital services.
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Scalability
The partnership between banks and fintech can easily be scaled up or down depending on the consumer requirements. If the partnership among them is a success it will not be tough to ponder ways to add more fascinating features or services for the users.
The Bottom Line
Needless to say, finance rules the world, but soon enough financial technologies are going to rule finance. The cutting-edge technology along with customer’s requirements for a user-friendly and safe banking experience has led to the adoption of fintech in both banking and other financial services like insurance. In the years ahead, fintech is set to expand with banking software and retail banking. Only time will tell how drastically fintech will change the way we look at banking services.