Blogs
Financial Technology (FinTech): Concept & Applications
The world is witnessing tremendous progress in every aspect after the fourth
industrial revolution, the engine of development and growth. This development affected
the financial and banking sector by developing new technologies that facilitate money
transactions and procedures. In addition, the covid-19 pandemic occurred and imposed
new ways of dealing with everyday activities and transforming them digitally. This
transformation included financial transactions and automated banking operations (online
banking services, digital wallets, etc.) to meet customers’ expectations in terms of time,
effort, and efficiency.
We can define Financial Technology as the technological innovation in the financial sector that improves operational efficiency, lowers cost and saves time and effort. FinTech aims to increase financial inclusion by allowing everyone equal access to appropriate financial services.
FinTech enhances financial capability by improving customer service، promoting economic diversification and institutions’ growth curve, opening cross-border opportunities, and reducing chances of fraud and manipulation.
FinTech has four main applications, but those are on a constant journey of development to keep up with the latest updates in the industry. The first is digital banking services, which enable customers to view their money transactions online, pay their bills, and transfer money, among a few, as well as digital payment services such as those offered by Thawani, PayPal, and Apple Pay.
Second, applying FinTech in insurance services by utilizing digital applications to reach a larger customer base and communicate with current customers. This is done using technologies such as the Internet of Things (IoT) and Big Data to offer a customized customer experience according to their preferences and data. Root Insurance Co. and policy bazaar are leading companies in this field.
Third, Fintech is utilized in regulatory systems as banks benefit from technologies in managing compliance, conducting analysis, and financial risk management that tracks potential risks and takes necessary actions. Leading companies in this field are Truiloo and Fenergo.
The fourth application is lending money by simplifying and cutting down the process of raising funds and distributing them between investors and beneficiaries online. Examples of this are companies such as GoFundMe and Patreon, which provide new lending services as opposed to the traditional ways through banks.
In conclusion, the digital transformation of official services and transactions mainly aims to save time and effort, cut costs, improve operational efficiency, and ensure user satisfaction. Today, FinTech promises efficiency and innovation in a world of an ever-evolving reality.
We can define Financial Technology as the technological innovation in the financial sector that improves operational efficiency, lowers cost and saves time and effort. FinTech aims to increase financial inclusion by allowing everyone equal access to appropriate financial services.
FinTech enhances financial capability by improving customer service، promoting economic diversification and institutions’ growth curve, opening cross-border opportunities, and reducing chances of fraud and manipulation.
FinTech has four main applications, but those are on a constant journey of development to keep up with the latest updates in the industry. The first is digital banking services, which enable customers to view their money transactions online, pay their bills, and transfer money, among a few, as well as digital payment services such as those offered by Thawani, PayPal, and Apple Pay.
Second, applying FinTech in insurance services by utilizing digital applications to reach a larger customer base and communicate with current customers. This is done using technologies such as the Internet of Things (IoT) and Big Data to offer a customized customer experience according to their preferences and data. Root Insurance Co. and policy bazaar are leading companies in this field.
Third, Fintech is utilized in regulatory systems as banks benefit from technologies in managing compliance, conducting analysis, and financial risk management that tracks potential risks and takes necessary actions. Leading companies in this field are Truiloo and Fenergo.
The fourth application is lending money by simplifying and cutting down the process of raising funds and distributing them between investors and beneficiaries online. Examples of this are companies such as GoFundMe and Patreon, which provide new lending services as opposed to the traditional ways through banks.
In conclusion, the digital transformation of official services and transactions mainly aims to save time and effort, cut costs, improve operational efficiency, and ensure user satisfaction. Today, FinTech promises efficiency and innovation in a world of an ever-evolving reality.