Modern technological advancements and innovations are bringing a significant change to the financial services landscape. Together, they have given rise to certain nontraditional financial service providers, more commonly referred to as FinTech companies.
FinTech is quite literally a combination of the terms finance and technology. Although financial technology has been around for several years, recently, it has completely revolutionized an individual’s interaction and experience. Using the rapid evolution in the tech industry, FinTech focuses on developing alternate and more robust platforms for day-to-day financial activities. These cover numerous beneficial processes for both businesses and consumers in numerous ways. Among its seemingly endless array of applications, FinTech offers services for insurance, personal finance, lending, consumer banking, equity financing, and many more.
Banks and other financial institutes initially used FinTech to run their back-end systems. But now, its scope has extended way beyond to include technologies that ease transactions across various industries. Businesses from insurance, e-commerce, healthcare, cybersecurity, real estate, and even the food sector employ FinTech services. As of 2021, companies like Robinhood, Bright Health, YieldStreet, and PolicyBazaar have also adopted FinTech’s amenities.
The rapid growth of cashless payment systems and other pioneering technologies like automation, blockchain, consumer lending, and machine learning has transformed several industries. In this blog, let’s look at how customers can reap the benefits of FinTech and how it can make a difference in their lives.
- Offers Greater Convenience
The most popular reason companies adopt FinTech is to offer their users a better and more reliable customer experience. Advancing technologies in the business and financial sectors provide convenient ways of conducting everyday operations. Learning more about these tools and services by enrolling in a fintech online short course can help industries streamline their financial processes.
With FinTech-enabled payment systems, customers have the luxury to process their dealings anytime and anywhere. In this era of smartphones and social media, customers prefer having access to services at their fingertips. FinTech takes care of this by eliminating restrictions such as blank-closing time or having to visit a respective bank to make transactions physically.
- More Alternatives
Companies that employ FinTech services enjoy the benefit of operating multilingual websites or applications designed for different regions. While some businesses enable access to their online website in various languages, others allow clients from varying countries to register on their platforms. This diversity in language permits consumers to choose services based on where they live. International customers are looking for ways to make global transactions and find this flexibility in mitigating the language barrier is especially useful.
Multilingual solutions also help companies get recognized by search engines in countries like Japan, South Korea, and China, where these search engines work in native languages. More importantly, businesses can think, work, and collaborate globally by giving their brand an international outlook.
- World-class Compliance and Security
Like any technologically-integrated industry, FinTech may fall victim to destruction by a single security breach, data theft, or cybersecurity infiltration. However, this is precisely why FinTech companies make significant investments in strengthening their security infrastructure, both online and offline. Therefore, customers can rest assured that their information is safe and secure from any internal or external threat.
Since FinTech is a universally accepted technology and not just something developed on a whim, it must meet specific compliance expectations to reduce risks. Regulatory acts ensure governance, risk management, robust finances, and mitigating possible customer harm.
- Reduced Costs
Contrary to popular belief, using cutting-edge technology doesn’t always cost a fortune—but can even help reduce high costs. For example, international remittances, which have undoubtedly improved lives for many communities, often come with a handful of hidden charges. Various factors can impact remittance costs like inter-bank currency conversion rate, FX spreads, process fees for each transaction, and a bank’s quoted rate. But FinTech service providers refrain from charging their customers any additional or hidden cost. Due to modern tools and technology, they can send and receive money across multiple currencies without worrying about a heavy conversion fee.
FinTech allows its customers to integrate physical and digital payment methods of various cards and bank accounts on a single interface. Due to this, transactions are made much more manageable and reduce overall costs for businesses and consumers.
- Better Speed
Of course, one of the most prominent advantages FinTech offers its customers is better speed. Technological advancements automate and streamline several processes that may take a long time to complete. For instance, applying for a loan through a conventional bank first means visiting the premises during its operational hours. Next, the processing time can be long and extensive, taking at least a few weeks before receiving funds. But working with FinTech accelerates the application process and gets funds much quicker since the whole procedure is digitally maintained.
Some FinTech services allow customers to choose from various delivery options, such as an express delivery system that expedites the transaction or transfer process.
- Increased Transparency
Transparency has become an unquestionable, revered business concept amidst successive controversies and crises. In the finance sector, it is a reliable way of making evident the product’s intangible and dynamic features. For FinTech services, transparency is increasingly important to establish confidence with regulatory authorities and attract investors, suppliers, and partners. Therefore, they keep customers in a tight loop regarding each transaction regardless of sending or receiving funds. Dedicated online customer support is often available around the clock, and real-time updates through mobile apps also significantly improve an individual’s trust and reliability.
Traditional banks generate an insurmountable amount of data daily. They must first process, authenticate, and validate this data to facilitate a particular transaction. But FinTech services allow organizations to automate and speed up these processes, subsequently improving their efficiency. Reducing the degree of manual labor employed in critical operations minimizes the risk of human error. Quicker and more efficient functions promote customer loyalty by providing a high-quality service. Even in areas where manual labor is essential, FinTech can still improve operations. Since it allows for access to platforms where employees can centrally store data, it makes it easier for workers to collaborate on tasks. Collectively, all these services make for a better customer experience.
The FinTech industry is constantly adapting and adjusting to meet evolving customer, investor, and regulator needs. Thanks to financial technology, cross-border payments, crowdfunding programs, lending, and consumer banking have come long. And with people and businesses increasingly shifting toward digital transactions, it is safe to say FinTech is likely to grow up and onwards from here.