Written by Cherlilyn
I’m sure everyone has heard about FinTech, but you might not be sure what FinTech is and why it has recently gained so much attention. This article will help you learn more about the basics of FinTech and its benefits in the finance and investment industry. Let’s dig a bit deeper into the topic!
What is FinTech?
FinTech, the word, is a combination of “Financial Technology.” We often use FinTech to refer to new technology that can develop financial and investment services to be more convenient, faster, safer, and more efficient. It can help companies, business groups, customers, or entrepreneurs better manage their financial operations, processes, and lives by utilizing specialized algorithms and software that are used on desktop and mobile applications.
We can classify FinTech into 2 types:
Traditional Fintech
Emergent FinTech
Traditional FinTech
Traditional FinTech is a significant technology business that supports the general financial sector, such as companies that developed internet banking or mobile banking services for financial institutions, etc.
Emergent FinTech
Emergent FinTech is a business or group of entrepreneurs who invented new financial innovations by using technology to reduce the role or eliminate traditional financial intermediaries such as PayPal.
Currently, there are tons of startups working in the FinTech business area.
FinTech is nothing new but is getting more and more attention as there are many new creative ideas and innovations that can make financial services more efficient and meet more users’ needs.
Benefits of financial technology for modern investors
Financial technology has tons of benefits. Today I will tell you about the most benefits investors will likely experience.
It reduces the cost and time of financial and investment transactions.
Inventing new financial transaction methods can reduce fees and save time for transactions. For instance, by using online stock trading programs, investors can conveniently and quickly make financial and investment transactions on their computer or telephone (desktop or mobile application version) instead of wasting time finding an ATM to transfer money.
Help investors make smarter investment decisions.
In this era where information is easily accessible, and sometimes there is too much information, I think some investors might experience an “information overload,” resulting in an inability to make decisions. At this point, information managing and analyzing tools can help them filter data and provide a summary.