When the terms “financial” and “technology” are combined simply it results in “fintech” which has been coined for the past few years. Technology-enabled financial products and services are defined as those that are delivered to customers through technological means. This might be in the fields of banking, healthcare, investment, or anything else that has anything to do with the finance world in general. Fintech, despite the fact that it is a relatively new term, is not a new concept. The financial business has always been shaped by technological advancements. Although the internet, paired with the widespread usage of gadgets such as mobile phones and tablets, has significantly sped up the process of development in recent years, all this has accelerated further.
What Is the Process of FinTech?
Despite the fact that fintech is a complex idea, it is feasible to obtain a thorough grasp of it. The financial technology industry (FinTech) makes financial transactions more accessible and inexpensive for individuals and enterprises alike. Also included are businesses and services that make use of AI, big data, as well as encrypted blockchain technology in order to conduct extremely secure operations inside an office network of employees.
Fintech, in its broadest sense, where fintech companies in India aim to simplify the transaction process by removing stages that are possibly superfluous for all parties engaged in the transaction. Venmo and CashApp, for example, are mobile services that allow you to pay other individuals at any time of day by sending dollars straight to their designated bank account using a mobile device. If, on the other hand, you paid using cash or a verify, the recipient would’ve been required to make a visit to the bank in order to deposit the funds.
Consumer advantages, capital investments, industry expansion, as well as innovation have all been facilitated by the rise of financial technology (Fintech). However, there are dangers and problems that come with this rise of fintech companies in India. Consumer empowerment, as well as freedom, are not without peril, as recent research has shown. The convenience with which mobile transactions might well be completed and the availability of unsecured loans may serve as a spur for individuals to spend or borrow greater than they can afford or require, resulting in unwelcome debt. The absence of the necessity to go via typical intermediary increases the risk that investors will wind up investing in premium products that they really do not fully comprehend. Investing through Fintech platforms may expose investors to a variety of hazards that they may not be aware of at the time.
Investors must safeguard themselves by getting a defined grasp of what it is they are investing in, properly appreciating the possible dangers involved, and knowing who they are interacting with. If in uncertainty, they should seek expert counsel.
Fintech vs. traditional banks: Which is better?
Fintech companies in India are often seen as the most significant competitor to traditional banking. Today’s financial system consists of some extremely old and conventional procedures and practices, which not only take a long time to complete but also cause it to be sluggish. As the world becomes more and more frantic, individuals will want a financial system that can keep up with their demands.
Because of their long-term position in the market, banks have been unable to innovate and progress even though they should have done previously. However, the world moves at its own pace. People require a replacement in order to meet their requirements. That’s where fintech companies in India may take advantage of the situation and successfully serve as an alternative.
Conclusion
Even now, financial technology (fintech) has a very limited part of the global banking sector. However, the pace of expansion is exponential. This sector is predicted to be valued at $309.98 billion by 2022, growing at a pace of around 24.8 percent each year.
