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FinTech and Its Benefits

Guest Post | Nov 3, 2022

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It’s human nature to constantly search for more convenient and accessible ways of living. This continuous struggle started the digital revolution and simultaneously established the importance of technology. Due to the multiple advantages of using technology, there is no field or industry where technology isn’t playing its part. One example of incorporating technology is FinTech, which brought a digital revolution to the financial sector. This article briefly discusses what FinTech is and its advantages in different aspects.

What Is FinTech?

FinTech is a combination of the words financial and technology. It refers to the innovative use of technology in the financial sector, its services, and its products. Any gadget, software, or app that works for simplifying and digitizing financial processes and transactions falls under the category of FinTech.

FinTech includes technology in money transactions, savings, investments, crowdfunding, cryptocurrency, blockchain, and more. Due to its diverse and robust applications, FinTech drastically improves traditional financial services such as loans, investments, savings, and bills by making them more accessible and advanced. Initially, FinTech companies were considered competitors to traditional banking systems. However, as its working became common knowledge, people realized that these approaches were combined to achieve efficient outcomes.

What Are the Benefits of FinTech?

Like other technologies, FinTech has drastically revolutionized the financial sector. Here are some ways it has benefited the financial industry:

1. Secure and Personalized Services

Traditional banking systems aren’t secure, and individuals must look after their money alone, especially during transactions, cash withdrawals, and account opening. However, with FinTech’s help, financial security is prioritized, as modern technology minimizes the risk of loss and physical theft. The possibility of cyber theft still exists in digital payment but can be countered by incorporating updated cybersecurity software when a FinTech app is being developed.

FinTech apps have a real-time tracking feature, which improves the transparency of the process. Additionally, since FinTech utilizes big data analytics and artificial intelligence, it can tailor customer services according to the exact requirements.

2. Mortgage Loans

Apart from secure services, FinTech also ensures a smooth and quick customer experience. For instance, mortgage loan lending is one of the most common services provided by banks. It is a time-consuming process with lots of documentation. Incorporating FinTech into the mortgage lending process helps simplify documentation, offers easy customer access, and decreases the total time consumed.

This process can be confusing for first-time mortgage lenders. For assistance, contact a company that provides professional help regarding mortgage loans. For example, Mortgage Maestro will give unbiased advice and the best mortgage rates Canada offers.

3. Cost-Efficient

Using new cutting-edge technology is seen as expensive and uneconomical, which makes people avoid using them. However, this is a misconception. FinTech lets you incorporate various financial tools into your banking system or online payments. These practices are cost-efficient in the long run. Most of these financial tools, such as PayPal and Venmo, don’t have any hidden charges or cancellation fees apart from the known percentage that gets deducted per transaction.

With the help of these tools, you can easily send or receive money locally or internationally in different currencies simply with a few clicks on your phone. FinTech applications also help customers save money by linking their credit cards with their bank accounts. Connecting your credit cards lets you contact multiple credit card offers and packages and allows you to choose a feasible option. Often users keep their savings in one account and hold credit cards from other banks, which leads to complications in transactions and deductions of a certain amount of money.

4. Robo Advisors

One of the newest and rapidly developing sectors of Fintech is the use of Robo advisors. Robo advisors or chatbots are automated solutions developed via artificial intelligence and machine learning technologies. These bots address all customers' queries and concerns with fast-generated and accurate solutions.

Initially, many questioned Robo Advisors' use because of the lack of human touch and the probability of error. However, the Robo advisors implemented in FinTech are now developed with self-learning algorithms. They use big data analytics, which leads them to provide personalized and comprehensive customer service. Robo advisors find their direct applications are customer onboarding, asset allocation, estate planning, and more.

Endnote

Over the past few years, trends and priorities of the financial sector have entirely changed, with the focus shifting towards FinTech companies and tools. Traditional financial institutes and banks can feel that this means losing business. However, that is not the case because conventional economic systems must work together with FinTech companies to achieve maximum output and efficiency. You get the most efficient response by incorporating FinTech tools and apps into existing banking systems.

See:  Plaid’s Annual ‘Fintech Effect’ Report Shows 84% of UK Consumers Use Fintechs to Manage Money

If you or your company is still skeptical about FinTech’s impact and importance. In that case, the benefits discussed above can help you decide whether to incorporate the technology in your financial sector or not.


NCFA Jan 2018 resize - FinTech and Its BenefitsThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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