Financial technology is the new technology and innovation, which aims to replace current traditional financial instruments in the provision of financial services. It is a rapidly emerging field, which makes use of advanced technology to enhance financial activities in finance. The best way to describe financial technology is to say that it is the combination of four key elements. These elements are information, digital tools, automation, and technology.
Financial technologies can be classified into three main categories namely app stores, mobile apps, and online-based apps. The app stores are those apps that can be used only on smartphones or mobile devices and these apps can handle multiple financial transactions at the same time. There are several fintech players in the app stores including finance brands as well as individual finance companies who have made their presence felt in the app stores.
Mobile apps refer to those apps that can be used on mobile devices like mobiles and devices such as tablets. There are several fintech players in this space including banks, financial institutions, mobile payment apps manufacturers, and brokers. Automated apps are those that deal with direct financial transactions. They use a software program to do things like managing employee payrolls. Financial services software such as payday loan software and check cashing software are examples of automated apps.
Digital tools refer to those tools and applications that make things more efficient and easier to perform. Financial technology companies are leveraging digital tools to provide financial services to customers. Digital tools include applications and software that make business processes more transparent and customer friendly. Some examples of digital tools in the financial institutions are ATMS which stands for Automated Transactional Management and Accounts Receivable Aging Systems. Online banking services are another example of digital tools used by biotech companies.
The other term used for Fintech is technology transfer. This is a concept that sees Fintech companies helping financial services firms and other businesses transfer technology that is currently being used. This technology could help firms to improve their performance and increase productivity. Some examples of technology transfer could include payment apps like PayPal that allow users to accept and pay their clients digitally.
Finally, the last term for fintech is technology transfer. This is closely related to outsourcing but is taken a step further and involves companies and organizations handing over technology that they have developed to financial services companies and other businesses. Outsourcing is now seen as a common practice in many fields. For Fintech this means developing cutting-edge mobile payments processing services that will help a bank manages its client’s accounts without having to maintain its in-house systems. This is seen as an important move for fintech companies looking to move into the future. The trend is expected to continue and shows no sign of slowing down.