The world has entered an age where technology has a bite in everything. The way that it is transforming finance is through what is called Fintech (financial technology). This is defined by Investopedia as being a new technology that is used to improve financial services, as well as automate them to improve response time, clarity, and transparency. There are five major areas that are impacted the most, with many others close behind.
- Shopping-People around the world prefer to shop from the comforts of their own homes. Fintech has made this possible by integrating financial transactions through secure platforms, such as PayPal. You can order anything that you could ever want, from a local vendor, or one that is halfway across the globe. You do not ever have to worry about the differences in money from country to nation because the software will automatically convert it to the area that you are logged in from. Or more accurately, where your IP address is listed. So, if you live in Australia and you wish to order something from China, your ordering site will convert the cost of the item to Australian dollars.
- Investing-Putting your money into stocks or bonds is so easy now that anyone can do it. It does not matter how educated you are on the markets. Companies have popped up across the internet that will take your money and invest it in the areas that are deemed to be the best fit for you. You can choose to invest lightly, or risk it all. The company that you choose to use will automatically invest the amounts that you want, in the way that you want. The days of stockbrokers yelling across a packed floor are long gone. You have complete control over your portfolios by using live feeds to monitor your money. You can add money to an investment if you want or sell if it looks like your choice is at the top of its profits. If you are not sure what you are doing, the sites that you invest through can teach you everything from the basics to hardcore investing. The choice is yours. The power is in your fingertips.
- Banking-Personal banking is no longer done in person by most people. Why would they? There are applications for your mobile device that allow you to bank, with most of the banks around the world. If you prefer to use a computer or laptop, you can go directly to their site and bank online. Mobile banking has increased to 1.9 billion individuals, and is projected to reach 2.5 billion by 2024, according to Statista. Transfers, deposits, withdrawals, and even loans can be started, and completed, with the click of some buttons, or a few swipes on your mobile device. Business loans are a breeze to apply for and can be deposited into your account within a short few days.
- Accounting-Accounting used to be an all-day process that required a person that had a degree, and lots of knowledge. Someone that had to constantly be trained in new laws and regulations to keep their company, or clients, out of legal trouble. Fintech makes it possible to keep your own books, file your own taxes, cut checks for payroll and accounts payable, and receive money for receivable accounts. Software integrates everything into one small program that you can learn to use through a class online or a booklet that you can read. The program does all the work for you. All you must do is plug numbers into it.
- Behavioral Statistics-Companies can use fintech to adjust how they do business. Behavioral statistics track the buying trends of consumers, projects what will sell in the future, and shows items that should be deleted from your inventory. The software can track and make decisions on enormous amounts of items within a split second. Much more than you could ever hope to do. The final decision will still be left up to you, but the information you need to make an informed decision will be laid out in front of you.
These are the top five ways that fintech is transforming the financial industry, but there are many more benefits that can be found. This technology will continue to grow and spread out throughout the world. Security and ease of use will be perfected, and you will be able to do everything from the comforts of your own home, from business or personal transactions to running your own company.