Financial technology is the innovative and technology-based innovation that seeks to competently compete with current traditional financial instruments in the delivery of global financial solutions. It is also an emerging market that makes use of advanced technology to enhance financial activities. Many financial technology companies are providing financial solutions for both small businesses and large conglomerates. This new breed of finance is focused on providing better financial service at a lower cost. It has a lot of advantages over traditional modes of banking and credit card and enables a variety of new financial transactions. The financial technology companies are making use of advanced software and hardware to facilitate better and faster online transaction processing, in addition to providing enhanced online customer support.
Several financial transactions are made online such as bill payment, online invoicing, online payables, online banking, Internet money transfer, and a cashless society. A cashless society refers to a society where all financial transactions are done via electronic means. A cashless society is also referred to as a ‘computerized everywhere’ approach, which aims to replace paper currency with bills and coins. In this case, a system of checks and debit cards is used to facilitate payments of goods and services. The cashless society implies a decrease in financial transactions and a rise in efficiency and effectiveness. This approach is designed to enhance the security, accountability, and savings of customers.
Fintech firms usually provide financial products such as payment platforms, trading platforms, merchant accounts, financial advice, investment, and insurance products, as well as cashless card machines. There is a rise in demand for these products because of a significant increase in the number of consumers who prefer to complete their financial transactions online. The internet has enabled consumers to make use of these products and services from anywhere in the world. Thus, consumers feel that they have greater control over their finances, as well as greater access to a variety of products and services.
As an example, you can use your smartphone or tablet to make payments for gas and groceries at your local supermarket. Some fintech companies provide app versions of their financial services and apps cater to different needs of different consumers. For example, an app that enables a business owner to calculate the cash he would need to pay his employees for a particular week and print out paycheck stubs is useful for salaried workers. Likewise, an app that provides budget planning and advice on saving for retirement can be of great benefit to retirees.
Although there are several biotech startups in the market, most of them have been able to overcome technological barriers and are now providing products and services that are appealing to customers. One reason for this is that mainstream financial institutions are also realizing the potential of accepting mobile payments through apps. They are trying to accommodate this by offering their apps, but as yet, they are lagging behind the startups in terms of development and implementation. This gap is expected to be closed in time as more establishments realize the benefits of accepting payments via these innovations.
A big challenge that traditional banks will have to face is how to stay ahead of the biotech industry. With many different apps being introduced every day, it is not easy for a bank to keep up with the competition. However, they have to continue to innovate to attract new customers and to maintain customer loyalty.