FinTech is a word combined by mixing two words, “financial and technology.” FinTech stands for financial startups that develop technologies to assist banks, and financial institutions in enhancing common day-to-day activities such as online money transfers, mobile payments, and online customer onboarding, and so on.
New technologies are constantly disrupting the financial industry. From peer-to-peer lending to Robo-advisors, customer screening, and onboarding, old business models are slowly moving towards technologies. FinTech companies can fit into any of the three main models of the financial institution, such as lending, asset and wealth management, and payments.
This growth of FinTech is pushing high-end banks to reconsider the way they interact with their consumers and potential customers. In the last few years, technology has transformed the way banks operate and the way consumers invest, make payments and apply for a loan. This is possible because banks partner with FinTechs to provide better services to banks, which in turn helps in providing better services to the customers.
The emergence of technology has changed the way the financial industry operates, it changes the structure of the industry and brings in unseen opportunities. Below we have listed how FinTechs have changed the financial industry.
Traditional banks with their traditional service offerings are becoming monotonous for the newer tech-savvy generation. Gone are the days that banks had to deal with the risks of loss of physical data such as guarding servers and material documents filled with personal customer information. With the help of FinTechs, banks can have computerized tellers, e-payments, digital records, and much more. All this digital data can be accessed and leveraged with simple buttons.
IT in financial services is just as important as any other industry. The need for technology is more than vital in the financial industry and is increasing day by day. Mobile apps are quickly becoming the biggest asset in the financial industry as more and more customers are utilizing smartphones for everything. This applies to firms that largely deal with cloud data. Having an agile technological framework is essential for banks in this technology fuelled world.
Technologies allow banks to enhance their customer base and operate globally. With online customer onboarding technologies and online document verification software, banks can reach out to customers everywhere on the globe and onboard them seamlessly. As more and more players are entering the market, the need for technologies is growing at an incredible rate and this demand is pushing forward the need for digital transformation in the industry.
It’s essential to protect customer data because of the growing amount of data breaches. Because of this, security has become a major concern for financial institutions. The vulnerability greatly exists because of the amount of data that’s existed in the cloud which can be shared or hacked. FinTechs have helped banks and financial institutions to secure their data, ensure that the customer data is secure and build better customer-business relationships.
FinTech solutions like online document verification software, online bank account verification software, and online AML and KYC verification solutions can help banks to push their services further.