Although the term FinTech has been a recent addition to our vocabulary, financial technology itself has been in use by both consumers and institutions for decades. From the first credit cards of the 1950s to the formation of the first e-commerce platforms in the 1990s, financial technology has served to make the movement of money a lot easier.
Just as technology is becoming more personalised and more consumer-focused, so too is FinTech—in more ways than you may realise. Here are a few examples of how FinTech has bridged the gap between you and your money.
Fast Finance Is At Your Fingertips
FinTech has been a part of your personal finance ever since you opened your first bank account, or got your first credit card, or made your first purchase online. Everything from the loan you purchased online, to your eWallet and banking app to the EMV chip technology that makes your card transactions safer is a sign of how FinTech has impacted your finances. Allowing you to conduct every aspect of your money management online, from money transfers to inter-currency payments to filing tax returns, and making the services available 24/7, FinTech has eliminated a lot of the bureaucratic legwork. What was earlier tedious and difficult to conduct without the, often expensive, services of an agent or accountant, has now become more convenient and affordable. Cutting down overhead costs has helped and will continue to help strengthen institutions and customer satisfaction in the long run.
Penetrating Traditional Models Of Banking And Finance
While most FinTech companies are customer-centric, offering everything from digital wallets to financial literacy tools, traditional banks are also turning to FinTech so as to ensure their services are up to date with modern requirements. With more traditional institutions turning their focus to mobile banking applications, FinTech has become more far-reaching. It has affected how urban and rural Indians conduct their day to day banking transactions on their mobile phones. With budgeting apps reading how much you’ve spent via your bank’s SMS and other modes like mobile payments banks, you can now budget your expenses like a pro.
Bridging The Gaps In Old School Finance
Another unique benefit of FinTech is that it has allowed small companies to plug the holes that larger financial institutions had left behind. New players in the loan market are a lot more likely to take on customers with no prior credit history, for example, thanks to advances in financial technology that make credit ratings redundant. Peer-to-peer marketplaces and business-to-business solutions also streamline the operational and transactional processes, making money move faster and more efficiently. While it may seem like the FinTech disruption is breaking down the tradition of big banks, the truth is that old and new financial institutions are entering a collaborative partnership, where one benefits from, and advances, the other. You can now get loans and credit cards easily, quickly, and effortlessly thanks to FinTech.
The Future May Be Cardless… But Not Cashless
While it may seem counter-intuitive that cash is here to stay while debit and credit cards will soon become redundant, bear in mind that for many consumers, cash is still the most personalised, unfettered and string-free means of finance. So, while we may not be swiping cards in the near future, we will still be dependent on ATMs—at least, a futuristic version. Many financial institutions have already started experimenting with eATMs that can be accessed through mobile phones. It is likely that soon, even mobile phones won’t be required and all financial transactions can be conducted via a simple retina scan or that all ATM and banking services will be integrated via Artificial Intelligence. While these changes may seem far-fetched, they’re closer than you think!
Whatever the future holds, one thing is clear: FinTech has always been around, and is definitely here to stay. It is important to know the various benefits and drawbacks of the financial technology you use today, so as to ensure you’re not at risk of fraud; however, with a healthy appetite for experimentation, you could use FinTech to make your personal finance management a whole lot stronger.