Financial technology (FinTech) describes the new and advanced technology that aims to improve and automate the use and delivery of financial services. At its core, the technology helps business owners, companies, and consumers to manage their financial processes and operations better. Utilizing specialized algorithms and software used on computers and smartphones, FinTech makes lives convenient and finances seamless.
The term emerged in the 21st century and was initially associated with the tech employed at the back-end systems of well-established financial institutions. However, with time there has been a shift to more consumer-oriented services, and thus there’s a more consumer-oriented definition.
FinTech also includes the use and development of trending cryptocurrencies such as bitcoin. FinTech is in the headlines primarily because of this segment; however, big money is still in its multi-trillion-dollar market capitalization and the traditional global banking industry.
Types of FinTech Application
There are four types of FinTech apps:
- Digital Banking
- Consumer Finance
- Digital Payments
- Digital Investment
1. Digital Banking
Digital Banking involves the automation of traditional banking services. These apps enable a customer of a bank to access the banking services and products through an online/electronic platform. It means to substitute the physical presence of a bank by digitizing all the banking operations with an everlasting online presence and thus eliminating the consumer’s need to visit a branch.
Almost every bank in Pakistan offers digital banking. Every bank has its own unique mobile application. There are some microfinance banks like JazzCash and Easypaisa that are offering plenty of services through mobile applications.
2. Consumer Finance
Consumer Finance deals with the lending process that takes place between the consumer and a lender. The lender can be a bank or any financial institution in some cases. While at other instances, the lender can be a business offering in-house credit in exchange for the business of the consumer. Consumer finance includes any type of lending activity resulting in the extension of credit to a consumer.
Microfinance banks like Finja and JazzCash, etc., are prime examples of consumer finance. Credit cards are another fascinating example. In Pakistan, these days, there has been a buy now and pay later policy that is getting quite popular. Many mobile services are operating on this model.
3. Digital Payments
A digital payment, also known as an electronic payment, is the transfer of money from one payment account to another one using a digital device such as a computer, POS (Point of Sales), mobile phone, SWIFT (Society for the Worldwide Interbank Financial Telecommunication), or a digital channel communication such as mobile wireless data.
It includes the payments made with mobile money, payment cards including debit, prepaid, and credit cards, and bank transfers. For instance, the most popular digital payment appss are Payoneer and PayPal.
4. Digital Investment
A digital investment platform is a digital solution that blends automated business management and financial functions with the human touch when needed. It allows customers to save and invest money in investment funds, shares, stocks and make more money out of their money.
Today, institutional and retail investors can invest in different types of assets in any jurisdiction and currency. One of the regional examples of digital investment is Octa fx. You can also invest in cryptocurrencies, oil, the stock market, etc.
FinTech applications are coming to the market at a fast pace. So, after the license issued by the State bank of Punjab for digital banking, many new players have joined this league. For example, SadaPay, NayaPay, QisstPay, Tag, Finja to name a few. Still, there is plenty of room for improvement in this market.
Crypto Currencies are the next thing that comes to mind as a digital payment. Crypto is a trillion-dollar industry that is linked to the Blockchain at the backend. Mobile apps for different cryptocurrencies, exchanges & market listings are the new norms of this industry.
FinTech has grown and changed over these years with the developments in the technology sector. Currently, there are different prevailing trends that define the growth of FinTech:
Blockchain technology allows decentralized transactions without the involvement of a government entity or other third-party organizations. The Blockchain tech and apps have been growing at a high pace for years, and the trend will also continue in the coming years as more companies turn to advanced data encryption.
Artificial Intelligence and Machine Learning
AI ML solutions have changed the way FinTech companies scale and have redefined the services they offer to clients. AI and ML enhance the value provided to clients, detect fraud, and reduce operational costs. Therefore, as these technologies become more accessible and affordable, they will play a huge role in the continued evolution of FinTech. Particularly as more brick-and-mortar banks go digital.
Growth Of Digital Banking
Digital banking today is easier to access than it was ever before. Many consumers already request and pay loans, pay insurance, and manage their money through digital-first banks. The convenience and simplicity will undoubtedly drive additional growth in this sector, and the global digital banking platform market will grow in the coming years.
The Technologies Empowering FinTech
Modern FinTech is mainly driven by Blockchain, Big Data, and Artificial Intelligence technology. All of these technologies have redefined how companies store, transfer, and protect digital currency. Primarily, AI provides valuable insights on spending habits for businesses and consumer behavior, enabling them to understand their customers better. Blockchain is a relatively newer technology within finance. It allows decentralized transactions without inputs from a third party, thus tapping a network of Blockchain participants to oversee potential additions or changes to encrypted data.
Advantages of FinTech
FinTech is offering a number of technological advancements and has thus leveled up the business arena. It has raised the bar by enabling all users to access all digital services. The services in the past were just available to some selected users, such as the rich class or those having a specific economic status.
However, data and technology made it less expensive and simpler to offer financial advice to the public. Consequently, something that was only available to a particular asset level in the past is now available to everyone.
To illustrate, certain advantages that empower the business of all levels include:
- Enhanced and improved customer service.
- There’s a financial advisor in your pocket for investment advice.
- It provides a streamlined and better financial system.
- You will have a better and a secure way of accessing.
- Infrastructural support.
- Less expensive and speedy payment processes.
- Industries can pace up with a transparent system.
How Can Xavor Help?
There are numerous applications for FinTech users. It is a vast field, from microfinance to digital lending, and Xavor helps you operate in any field. With the help of Blockchain at the backend, we can create a smart, secure, and efficient system in FinTech for you. We also provide services to different companies around the globe in their FinTech product.
Our mobile app development services include:
- UI/UX Design Services
- App Development (Android & iOS)
- Integration of any 3rd party payment gateway
- Automated QA & Testing Services
- Uploading & Managing Apps on App Store
- Enterprise iOS app store management
- Maintenance & Support
So, contact Xavor today and avail of the top-class FinTech services from the industry experts and professionals for your business.