If you are a business enthusiast and follow the updates on the world economy, you must have heard the term fintech from any visionary business leader. Let’s know what is fintech and why it matters to all businesses?
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What is fintech?
Fintech is the revolution in the financial history of the world. But unlike the simple naming of this multibillion-dollar industry (combining finance and technology), it refers to a wide range of products and business models associated with the advantages of technology.
So, with the infusion of tech geniuses and smart business people, fintech is now offering a new era of finance and business setup to the world. And fintech is not only significantly impacting the present industries but also opening a new chapter to show what the business world will look like a decade later.
Still cannot relate to fintech? You, too, maybe a part of this industry unknowingly. Let us give you some scenarios:
- You are making payments through Nagad or Bkash,
- You took a loan not from a bank but from a crowdfunding platform
- You are investing in shares using any AI-generated applications
- Or just simply transferring money using your mobile phone.
Do the actions mentioned above sound familiar to you? If yes, you are also a part of this industry that is said to be the economy’s future.
What are the parts of fintech?
With the help of fintech, more creative and big business opportunities got the platform to flourish. And it transformed the way of banking or any financial exchange system with innovative use of tech.
You will hardly find any business nowadays that is not operating online. By opening applications for android and apple, people have started doing business on the go – what do you think made that possible? Without any doubt—fintech.
Not only has it changed how we exchange or borrowed money, but fintech helped to form new and advanced business models and product delivery. And the whole business process is now level easily with digital payment, mobile banking, loans, investments, and financial technology.
So, the parts of fintech are:
Cashless payment:
Even a decade earlier, the banks used the older method of filling out a pile of forms to get a loan or even withdraw money. But after the fintech revolution, cashless payment is now possible through cards, QR code payment, internet banking, and other digital payment methods.
Example: Apple pay, Alipay, Rocket, Nagad (in Bangladesh)
Crowdfunding platforms:
Do you think you have the most innovative plan to open a startup on your own but cannot do that because of funding? Then fintech has the solution for you.
Fintech has created running business platforms where you can collect funds. INDIEGOGO, gofundme, and start engine have helped new business startups with millions of dollars.
Robo-advisory:
Alright! So, now that you have the business plan and fund, you may want to look at the share to invest in after getting your revenues. You can always decide where to invest but may not have the time to analyze the market and make the best decision.
Using Artificial Intelligence or Robo-advisory, fintech can help you to decide where to invest your valuable money keeping in mind the low risk and high yield.
But can an AI outweigh the expert human finance team? The answer is both of these ways are perfect for you to adopt. However, if you are looking for ways to cut off your financial cost, you should probably go for AI.
Check out So Fi, Wealthfront, and Stash for more details.
Virtual currency:
Most economists have declared that virtual currency will soon be the only transaction method. And Bitcoin, ethereum, NEO, and STELLAR are known worldwide to initiate the journey.
Virtual currency is available only on the web. So, there is no physical presence of these currencies. If businesses want to grow in this fast-paced world, the only weapon they need is to master the finance technology linked up with blockchains.
Why does it matter to all businesses?
After the pandemic outbreak, it is even hard to start a business where fintech made it all possible with advanced technology and multiple startup options.
People empowerment is now possible; the proof is the Global fintech market report. In 2021, the value was more than USD 135.90 billion. And by 2027, the expectation is to reach $266.9 billion.
Conclusion:
In this article, we have tried to explain fintech and why it matters to all businesses. To stand out in any business sector, you must take the initiative to think strategically and ahead. And with fintech, you can do that seamlessly.
Even though the technology is still not flawless and suffering from privacy threats, hopefully, the solution will come out eventually. Therefore, try to get accustomed to the technology and prepare your business for the future.
