Conducting transactions is a feature of our everyday lives. As we’re stepping deeper into a digital era fintech is more relevant than ever. It’s vital to businesses and individuals.
The primary mark of the digital era is technology – that unstoppable force that gives us convenience and comfort in just a few clicks. Nowadays, countless apps enable people to connect for business or leisure.
The term fintech is a merging of finance and technology – important factors in today’s world. As technology evolved so did finance. Hence the rising number of banking options online.
Just as technology impacts finance, so fintech does the economy and its various sectors. It is shaping many sectors by reducing friction and making transactions smoother. It streamlines financial services and revolutionizes the ways people invest and manage their finances.
To better understand how fintech impacts various sectors, we can dive deeper into the changes below.
Fintech and Entertainment
Entertainment is one of the fastest-growing sectors in any economy. By implementing tech innovations, various entertainment providers and operators enhance the experience. As an example, you can turn to the rise of many streaming platforms such as HBO Max, Netflix, Hulu, and others.
The convenience that comes with fintech payment apps allows users to enjoy their favorite shows and films without having to worry about subscription fees. The platforms accept multiple payment options that allow providers to charge clients subscription fees automatically.
All users need to do is confirm the transaction by entering a simple code. The same goes for subscriptions to online magazines, newspapers, and video game platforms.
One subsector that has been greatly influenced by fintech is the iGaming sector. When people look at an online casino they think of the games and bonuses. Although they aren’t wrong in operators entertaining players via their platforms, fintech and its payment methods play vital roles in the world of iGaming.
Apart from the games, promotions, tournaments, safety, and security tools, players need an abundant payment methods section. Thanks to fintech, they can access plenty of deposit and withdrawal methods such as e-wallets, cryptocurrencies, mobile payment apps, and more.
In other words, the entertainment sector offers greater accessibility and availability due to fintech solutions.
image via freepik
Banking and Financial Inclusion via Fintech
The traditional banking system is a husk of its former self due to fintech. Modern solutions enable accessibility and efficiency, traits anyone can get behind. Online banking platforms transform each computer and laptop into a virtual bank that allows users to pay their bills, send money, and manage their funds.
Mobile banking apps increase the level of accessibility as users can effectively manage their accounts on the go. The rise of firms specializing in fintech solutions such as digital wallets and peer-to-peer lending platforms empowers individuals in emerging economies to participate in a global financial system.
One of the most visible impacts of fintech is in payments and transactions. Financial technology solutions are common payment systems today. Digital wallets, mobile payment apps, and even cryptocurrencies show an unparalleled level of convenience.
Mobile payment apps allow users to make payments anywhere. All they need to do is connect to the Internet and log into their accounts. Electronic wallets offer a similar experience when using them to pay for goods and services.
Cryptocurrencies are leading fintech solutions for several reasons. Despite the fast transactions, they keep their users anonymous and secure. Crypto users don’t rely on traditional banking systems and own their assets. With friendly regulation on the way, they’ll have no legal barriers to worry them.
Investment and Wealth Management
Some human investors like Warren Buffet have a wealth of experience in replicating a successful investment portfolio. But even Mr. Buffet is prone to mistakes. With fintech, you won’t make any mistakes when investing.
Robo-advisors will manage your portfolio automatically. Behind the scenes, artificial intelligence and data gathering and analysis pull the strings of these advisors. In other words, they’ll make informed moves whenever they remove or add assets to your portfolio.
The best part about robo-advisors is that they can cater to professional investors and beginners. They can even teach the ropes to anyone looking to learn how to invest. In addition to these advisors, crowdfunding platforms allow investors to support startups and projects.
Insurance Technology
The potential and applications of fintech are visible in the insurance sector with the emergence of insurance technology. With AI and data analytics on their side, insurers can accurately assess risks and streamline underwriting processes.
Telematics devices on vehicles and other devices allow a tailored approach to charging premiums and insurance based on usage. Furthermore, insurance platforms and apps make the insurance process easier as they’re available to anyone with an account, with tiers for everyone’s budget.
Real-Estate Technology
Another subset of fintech solutions is real-estate technology. Streamlined property transactions via digital platforms and apps significantly reduce the time and costs that come with purchasing and selling real estate. Crowdfunding platforms enhance fractional ownership enabling multiple investors to collectively invest in real estate projects.
With the addition of blockchain technology, all investors and concerned parties will have transparent and tamper-proof records that enhance trust in real estate transactions. Fintech and real estate technology revolutionize the way people finance and manage property.
Regulatory Technology
Regulatory technology solutions leverage fintech solutions to assist financial institutions in complying with regulatory requirements. With both solutions working in unison users can expect enhanced risk management, regulatory reporting, and smooth compliance processes.
By automating such processes, regulatory tech solutions enable financial institutions to comply with evolving regulations faster and reduce the costs and risks of non-compliance. In other words, fintech and regulatory technology work well together.
Bottom Line
Financial technology is a moving force in today’s digital economy. Fast transactions and convenient access to financial services are slowly becoming the norm. Individuals and companies will continue to use fintech solutions to reduce friction and enhance daily operations as we venture deeper into a digital tomorrow. As technology advances, financial technology will advance with it and continue to improve all financial aspects.
Featured image credit: Freepik
