What is FinTech? |
Posted: October 7, 2021 |
FinTech refers to financial technology, or the integration between the financial sector and tech sector. Most people use the phrase FinTech to refer to any company, technology, gadget, or entity that is making some impact on traditional financial services. Below is a more detailed explanation of FinTech, and how the sector may impact your life. Understanding FinTech Financial technology, or FinTech, refers to all the software, applications, algorithms, and hardware tools that are utilized by financial companies or for financial transactions. When people imagine FinTech, they may be thinking of extremely high-tech software or gadgets that are allowing financial services companies to analyze data in a more productive way. Such use cases are present, but FinTech can be a lot simpler as well. FinTech and Your Life Think about the way that you bank, compared to how you may have done so in the past. Anyone who is in their 30s, 40s, or older remembers when banking involved visiting a physical location at least once every few months. Whether you wanted to deposit a check, withdraw a large sum of money, or request a service from the bank, you would speak to someone in person. People can still go inside banks to get assistance, but Fintech companies means that almost all banking transactions can be done digitally. Both major and minor banks have applications that you can use to upload a check, which is often called mobile check deposit. Other ways that FinTech has impacted banking include the easy way that you can transfer money from one account to another, or send money to a friend or family member. Easier Access to Credit A major way that FinTech is changing people’s lives is through the advent of easier access to credit. There was a time when you had two significant options for borrowing money for regular spending - get a credit card or apply for a bank loan. Now you can utilize services such as Affirm or Klarna, where you are allowed to shop anywhere you want, but pay through the service. The amount of money you borrow for that purchase is then owed in several installments, which may be interest-free or involve a specific APR. A Growing Sector There is no denying that FinTech is a sector that will continue to grow in 2021 and beyond. Major financial players, such as JP Morgan, are investing tens of millions in FinTech startups. The financial sector understands that technology will determine how their industry evolves in the future.
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