Introduction
The term fintech defines two different words, “finance” and “technology. Another term for fintech is “financial technology”. The main purpose of fintech is to make an advancement in the financial services of any business or a company (Philippon, 2016). The usage of this advanced technology of fintech is growing in many businesses. This makes the working and growth of business more efficient. There are many applications of fintech in the industry, such as cryptocurrency, mobile banking, etc. In a lot of financial activities, there is a huge advancement and easiness because of fintech, such as now, we can pay bills through cell phones without visiting banks. In short, any financial activity can be done easily now because of fintech. The most common application of fintech is in banking or managing insurances (Puschmann, 2017).
Description
Fintech is an advancement made in the field of finance or business. The usage and applications of fintech are increasing day by day. There are a lot of companies all around the world, which are using fintech for their financial services and are experiencing a great positive impact on their business (Gai, Qiu and Sun, 2018). Fintech, itself is not some industry or a field. It is just an advancement in the finance field or industry. In the field of technology, there was always a bit part of finance (Lee and Shin, 2018). Such as in some finance apps for personal use, trading system, and much more.
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Applications of Fintech
Banking
The fintech industry plays a vital role and helps in online banking, most importantly, mobile banking. Mobile banking is used in many fields of our daily life. Such as for online shopping, paying bills online, etc. Mobile banking is getting more and more advance since it was introduced. Everyone wants easy access and an easy procedure to deal with banking. And mobile banking is getting effective and easy to use, that anyone can pay bills from their mobile phones just sitting at homes. Another example is “neobanks”. Neobank is a type of bank, which has no physical branch. They deal with their customers online. They provide almost all the facilities as normal banks do. Such as managing checks, loans, money savings, and many more facilities. All of this is done on a mobile phone or any other digital device. Varo and Chime are some common examples of Neobank.
Cryptocurrency
In the industry and field of cryptocurrency, fintech is widely used and is helpful in various ways. Because of fintech technology, cryptocurrency and blockchain have started working more efficiently. There is more advancement in both of these fields because of fintech. They have become safer because of this technology. When fintech is used in any of these industries, it leads to many other advanced services in the financial field. Many companies of cryptocurrency are seeking new ways to make their financial services and procedure more efficient.
Investment and savings
There are a lot of micro-investing applications that are growing day by day. Anyone can start from a small investment and can earn as the business grows. On today’s date, it is the easiest and the most convenient way for a lot of peoples to start a business with a small amount of investment (Nicoletti and Weis, 2017). In these fields of investing and saving apps, fintech plays its vital role. It makes the outcome better and more efficient. Fintech is one of the reasons for the increase in investment apps. Fintech technology applies new ways, which are easy, efficient, and more productive to the saving and investment apps industry (Magnuson, 2018). The outcome or result is more beneficial and profitable when fintech technology is used in such an industry. This is the reason that people have started using and taking more advantage of Fintech technology.
Payments
Making and managing payments has always been tough and difficult. Before some new technology was introduced and before advancements in the field of banking especially, there were no easy and convenient payment methods (Goldstein, Jiang and Karolyi, 2019). But now, there are a lot of ways to pay for anything through a mobile phone or any electronic device. After that, since the fintech has been introduced in the industry, there is an increase and a great advancement in all the payment services. The procedure is much easier, which attracts a huge number of users towards it (Rochon and Tourpe, 2017). Some examples of payment services are, PayPal, Square, Stripe, etc. This is one of the most common applications of fintech which is so beneficial and productive.
Insurance
There is another growing industry these days, which is insurance. Many insurance companies have started using fintech technology. It resulted in a great impact on the insurance service and the outcomes. The companies, using the technology of fintech helps in automated processing for the insurance industry. They also help in expanding the coverage for some traditional insurance companies (Dorfleitner, Hornuf, Schmitt and Weber, 2017). Some examples of insurance companies, using fintech technology are Root insurance, Oscar Health, etc.
Conclusion
The term fintech is generated from two different words, which are “finance” and “technology”. The main purpose of fintech is to make the financial services of different companies more efficient and beneficial. For the past 10 years, there has been an incensement, in the applications and the users of the fintech. The results of using fintech in the services attract more people and that is why the consumers of fintech are increasing day by day. There a lot of applications of fintech (Schueffel, 2016). A lot of various companies are using the technology of fintech. And almost, all of them are experiencing a great positive impact on their services. The technology of fintech is also used in banking, it is mostly used in online banking. It has made the banking facility more convenient. Another application of fintech is in making and managing the different payments. Overall, the technology and the industry of fintech is growing, time by time and is advantaging many companies and other industries.
References
- Philippon, T., 2016. The fintech opportunity (No. w22476). National Bureau of Economic Research.
- Puschmann, T., 2017. Fintech. Business & Information Systems Engineering, 59(1), pp.69-76.
- Gai, K., Qiu, M. and Sun, X., 2018. A survey on FinTech. Journal of Network and Computer Applications, 103, pp.262-273.
- Lee, I. and Shin, Y.J., 2018. Fintech: Ecosystem, business models, investment decisions, and challenges. Business Horizons, 61(1), pp.35-46.
- Nicoletti, B., Nicoletti and Weis, 2017. Future of FinTech. Basingstoke, UK: Palgrave Macmillan.
- Magnuson, W., 2018. Regulating fintech. Vand. L. Rev., 71, p.1167.
- Goldstein, I., Jiang, W. and Karolyi, G.A., 2019. To FinTech and beyond. The Review of Financial Studies, 32(5), pp.1647-1661.
- He, M.D., Leckow, M.R.B., Haksar, M.V., Griffoli, M.T.M., Jenkinson, N., Kashima, M.M., Khiaonarong, T., Rochon, M.C. and Tourpe, H., 2017. Fintech and financial services: initial considerations. International Monetary Fund.
- Dorfleitner, G., Hornuf, L., Schmitt, M. and Weber, M., 2017. The fintech market in Germany. In FinTech in Germany (pp. 13-46). Springer, Cham.
- Schueffel, P., 2016. Taming the beast: a scientific definition of fintech. Journal of Innovation Management, 4(4), pp.32-54.
