Author: apoorv

Financial technology has revolutionized the finance industry. It has made everyday financial services easy to execute and at very cheap costs. Fintech is advancing every day and recently it has been said that Artificial intelligence will become a big part of fintech. Analysts predict that over the years artificial intelligence will make it big in the field of fintech. The setback to this is that it might take away jobs of people in order to reduce cost and increase efficiency. This will potentially remove the human element from the fintech industry. This is by some perceived to be good and by some bad for the fintech industry. As fintech deals with people’s money there is a high trust factor involved while using these services. Once the human element is taken out from these services it might prove to be really hard for users to trust these services. In my opinion this could prove to be true as once someone wants to invest through a fintech company and realize that the service uses artificial intelligence to communicate and invest it people might be doubtful to trust them as compared to a company where the customers have the convenience to talk to a human being. Therefore, It is hard to say how artificial intelligence will effect the fintech industry, but either ways it is slowly coming in the fintech industry.

 

https://www.forbes.com/sites/madhvimavadiya/2017/02/27/artificial-intelligence-human-fintech/#4a9e899d46a1

 

 

The world of fintech is growing at a rapid pace. There is a lot of competition coming up in this industry. Technology is allowing people to innovate and provide financial services to people all across the world. It is helping people to transact money from different parts of the world. Unique services are offered which before the space of fintech were very hard for the common man to get a hold off. The problem now is that there are too many such firms that are offering the same services. Financial analysts believe that the level of security and the trust the fintech company offers is going to be a key differentiator. Generally, price of the service is what determines the interest of a customer but in a space where the service is prone to frauds to pay the extra percentage or dollars for a more trustworthy and secure service. Analysts say that the trend for the successful companies for now and in the future is to work towards simplicity of the app and having the best security features amongst its competitors to have an advantage in their space.

 

http://fortune.com/2017/03/10/financial-technology-trends/

The biggest concern of any Fintech company is to prevent fraud and ensure safety. Several companies are unable to do so. Most companies rely on other companies to prevent fraud from happening on their company. This sometimes doesn’t work out well as there are several frauds still occurring in todays world. A Fintech startup, PromisePay, has tried to solve this issue. Their service ‘enables payments to be held in escrow, so a customer can pay for a service online, with the funds only released once it has been satisfactorily completed.’ They are doing this with online market places. There main aim is to prevent fraud and building trust between customers and online services. This model in Fintech could prove to be very useful. Several online platforms could benefit from this as this reduces the risk of frauds as they only payout the sum once the transaction between the users has been completely finished. Innovations in Fintech which are making online services more secure and efficient are paving a way for customers to increase their use of Fintech as security of use of Fintech is growing.

 

https://www.forbes.com/sites/jlim/2016/07/20/promisepay-is-solving-probably-the-biggest-problem-of-online-payments-trust/#444d45f93ce9

 

https://techcrunch.com/2016/06/14/australias-promisepay-a-payment-platform-for-online-marketplaces-raises-10m/

 

Fintech is a growing industry and investments to grow it even bigger are increasing at a rapid pace. This article talks about how investments in Fintech are growing across the world which could result in a revolutionary 2017. As we know Fintech is a growing and has influenced the investment industry, money transfer, payments, insurance and almost every other banking service. There are Fintech startups across the world that are making banking services simpler for the everyday user. Millennials across the world have become accustomed to services like Venmo, Robinhood and Ant Financial. As Fintech is growing the existing popular Fintech service providers are trying to gain more and more market share of this industry. In the past year Fintech has grown a massive 11% or 17.4 billion dollars of which united states is responsible for 6.7 billion across 650 companies and china is responsible for 7.2 billion across 28 companies. Fintech is helping developing countries across south east Asia to introduce simpler net banking solutions to even the rural areas which were not accessible previously. Investments in these Fintech startups is growing. This shows how Fintech is growing as a industry and companies that are doing well with their security and simplicity of their services are in line to become leaders of this industry.

 

https://www.forbes.com/sites/lawrencewintermeyer/2017/02/17/global-fintech-vc-investment-soars-in-2016/#5bdffa332630

Fintech innovations is not only helping the big players in the finance industry but also helping small businesses to become more efficient. Generally, FinTech is related to investments and payments and other tech. However, there are people that are building technologies to improve fundamental financial tasks such as bookkeeping, Keeping track of their payments, receivables and inventories. One such company is BlueVine which was founded 3 years ago. They address the issue of everyday funding to address short term needs. They focus on smaller businesses at that time which was an untapped market. The founder of BlueVine drew inspiration from his father’s small business and his own knowledge and experience about FinTech to use Technology to make the financial handling of data in smaller businesses simpler to make data keeping more efficient and less time consuming. It is fascinating how technology is effecting even the smaller parts of every business in the world through innovations in the financial industry.

 

https://www.entrepreneur.com/article/288486

 

Fintech is changing the world people manage their money, apply for loans, maintain credit ratings and other services that banks provide. This is true for the western more developed companies. Fintech is slowly trying to effect the developing countries in the same way. More than half the population is lives in the developing world category of which many of them are not tapped by the Fintech market. This article explains how several Fintech companies are adapting to the situations in their own country to increase the ability for people to manage their money and increase eligibility to get loans. One such example is SERV’D in India which helps informal workers such as drivers, cooks and nannies to create simple formal work contracts and pay them online. This helps in them in a big way to apply for loans as they now have a way to show their income and ability to get a loan and pay it back accordingly. With the help of such innovative Fintech startups in the future populations that do not have banking ability or services around them to grow and increase their ability to manage money and achieve a higher standard of living.

 

https://hbr.org/2017/01/fintech-companies-could-give-billions-of-people-more-banking-options

 

Robo-advisory was one of the first use of financial technology in the investment space. Robo-advisors provide an online wealth management service based on their proprietary software. This has reduced the advisory costs as there is less human involvement therefore reducing their cost per client. This has enabled greater use of technology to achieve simplicity and avoid the unnecessary paper work involved. The current generation in particular can use these services with ease as these are provided through apps and with an increase in the smartphone usage, these could be perceived to be more user friendly. This technology also helps you to invest on your own without having to interact with any representatives and some Robo-advisors even offer significantly less fees as compared to the traditional wealth management firms. The financial technology in these Robo-advisory firms is developing fast and with this they have eliminated minimum investment amounts and targeting younger people and also allow people to try and invest with smaller amounts to build confidence. This to me is a great revelation and use of FinTech to provide investment services to the common man.

 

https://investorjunkie.com/37307/5-ways-robo-advisors-changing-investment-industry/

FinTech companies have made it easier for people to commit a fraud in terms of claiming insurance or asking for loans. There are several startups in America that analyze your credit history and your online profile before coming up with an estimate of your credit rating. Accordingly, they provide you with insurance or grant you loans with an appropriate rate of interest. Due to advanced FinTech this can easily be done online. This has made it simpler for hackers to commit fraud by creating false identities or using someone else’s identity to commit an insurance fraud or get a better interest rate on your loans. Some new Fintech firms have come up to tack these situations by “providing help with verifying and triangulating identities with pseudo-PIIs (Personally Identifiable Information) such a phone numbers, email addresses, device id & geolocation, online social identity and credentials.” I believe that as everything is moving online it is getting difficult to keep the financial services secure. Fintech needs to not only work towards innovation but also work towards securing their services online with as much grit.

 

http://lendfoundry.com/3-common-identity-fraud-that-plague-fintech-startups-how-to-avoid-them/

This article shows how financial technology can simplify and make it easier to understand financial data. Many people look to invest money and once they read about the different finance instruments they can invest in they research about these products such as equity, debt, insurance etc. The information on these products isn’t easily understandable and due to this people over pay through fees, choose the wrong instrument and sometimes don’t even go through with investing their money because of the financial jargon describing these products. To tackle this, they have created a financial interactive technology which is similar to a nutrition label for a financial product. The financial label is interactive which not only makes it simpler to understand but also increases your knowledge of the products you are trying to invest in. For example, you will be able to understand attributes of funds you are trying to invest in a simpler manner like expense ratio of the fund or that fund’s NAV. To me this is a great use of technology as people need to invest their money in the most efficient way possible even though they do not have a financial background. This financial technology helps them to do so.

 

https://knowridge.com/2017/01/interactive-nutrition-label-for-financial-products-helps-investors-make-better-choices/

This article talks about how the future of money is going to change from what it is today to cryptocurrencies. The article points out that human beings use currency of their country or other countries because it is backed by their central government. They do so because they have trust and surety from their government that their money is valid and they can use that in exchange for goods and services. Currently with cryptocurrencies that is not the case. Even though bitcoin uses block chain to function and reduce the risk of manipulation it is still created by an unknown identity which cannot be trusted. Instead this article suggests that the technology used to create bitcoin is fine but if this is done by a centralized government or a recognized world organization then it will have more credibility and people will be willing to switch to cryptocurrencies. I am unsure if it is still completely safe as bitcoin users are hacked everyday. If the world has to go completely digital, then Information systems would need to be more secure and definitely be formed by an authority that can be trusted by common man.

 

https://magazine.fintechweekly.com/articles/the-future-digital-currency-may-not-be-the-bitcoin?utm_medium=email&utm_source=fintechweeklycom