6 things you don't know about Fintech

We live in a world that is always evolving technologically, so keeping up with all of the trends is a crucial element of professional growth. Fintech is one such trend that has been for quite some time but has only recently become a vital aspect of any financial firm. If you are unfamiliar with the term “fintech,” please read on. However, like with any industry, there are some things that you may not be aware of, even after being acquainted with the phrase and its business. These are six facts about fintech that you most likely did not know, and they are all true.

Fintech is a threat to traditional banking.

The topic of whether fintech or traditional banks is superior is tough to answer. Both have distinct benefits; fintech is a relatively new industry that has generated a lot of media attention. Aside from that, the approval rate is speedier – practically everything may be completed in less than 24 hours. Traditional banks, on the other hand, operate under a whole distinct set of dynamics. They have been for a long time, and people are accustomed to them. Another advantage of conventional banks is that they have physical locations where customers may interact with them in person.

Years ago, the term “fintech” meant something very different.

Despite being viewed as rivals, the term fintech (a combination of the terms “finance” and “technology”) really derives from the conventional banking sector. Specifically, despite the fact that this phrase alludes to something relatively new, its earliest use goes back to the 1970s, when it was used to describe the back-end technology employed by traditional banks and major banking institutions. When PayPal was launched in 1998, all of this began to alter. This was the point at which the term “Fintech” began to take on new connotations.

Fintech encompasses far more than simply the financial sector.

Even though our initial link is with the banking industry, fintech is much more. Fintech comes to transform the way we conduct these transactions, in addition to dealing with money and other transactions that traditional banks typically perform, such as loans and credit ratings. These frequently take the shape of multiple platforms and the introduction of new payment methods that make the single transaction easier. Consider PayPal in comparison to any other traditional bank – it’s totally natural that this payment option is favoured by many individuals globally due to its adaptability. On the other hand, it takes a lot more than one individual to make a difference.

4. It transforms the credit market.

One of the things that fintech does is make the entire financing process more pleasant and effortless. One of the reasons for this is that we can now discover a variety of applications and websites that allow us to compare the pricing of credit card loans, which was previously impossible. Furthermore, fintech lending markets simplify and streamline this process by allowing any firm to fill out simply one application, which is then routed to many loan sources. All loan applications are completed online, further simplifying the procedure. Consider the following scenario: you wish to get a loan for your firm.

People are still investing heavily in fintech.

It’s hardly surprising that many large corporations want to invest in fintech, as it’s a very profitable and exciting industry. Furthermore, this is still a developing business, and we may expect big things in the future. It is supported by both technology and money, making it even more appealing for investment. Over $300 billion has been spent on fintech over the previous decade, and the business is currently worth more than $4.7 trillion globally.

Fintech has assisted in lifting individuals out of poverty.

Fintech has assisted in lifting individuals out of poverty.

One of the things that fintech excels at is lifting people out of abject poverty. How is this accomplished? By providing the choice of a digital bank to inhabitants of developing nations who previously did not believe they required traditional banks. Many nations throughout the world have individuals who are unable to buy or sell products or services online.

So fintech can do a lot for a country’s economy, and another advantage is that the expenditures required to build the infrastructure are slightly cheaper than those required to build the infrastructure for a physical branch of a company.