The Rise of FinTech: How Apps are Transforming Personal Finance
Financial technology which is (FINTECH) for short, is the term used to describe any technology that delivers financial services through software, such as online banking, mobile payment apps, or even cryptocurrency. Fintech is a broad category that encompasses many different technologies, but the primary objectives are to change the way consumers and businesses access their finances and compete with traditional financial services.
Broadly, fintech driven business refers to any company using the internet, mobile devices, software technology, or cloud services to perform or connect with financial services. Many fintech products are designed to connect consumers' finances with technology for ease of use, although the term is also applied to business-to-business (B2B) technologies as well.
Rise of FinTech in the World of Personal Finance
Fintech has been around for a much longer time. While the latest evolution of fintech allows you to pay for a cup of coffee with a mobile app, the history of financial technology can be traced back to the earliest credit cards that were adopted into the general public in the late 1950s.
After the credit card, financial technology evolved and introduced several major milestones to the mass market, such as ATMs, electronic stock exchanges, bank mainframe computers, and online stock exchanges. Each new piece of technology advanced the financial infrastructure that most people used every day but rarely had to think about.
Today, fintech solutions are challenging the traditional financial infrastructure, as more services transition to a new technological phase, such as using a payment app on a mobile wallet instead of carrying physical credit cards in a physical wallet. With these and other instances, FinTech has transformed personal finance as we know it.
Uses of Fintech
1. Banking
Mobile banking is one of the largest aspects of the fintech industry. In the world of personal finance, consumers have increasingly demanded easy digital access to their bank accounts, especially on a mobile device.
2. Crowdfunding Platforms
Crowdfunding platforms allow internet and app users to send or receive money from others on the platform and have allowed individuals or businesses to pool funding from a variety of sources all in the same place.
Instead of going to a traditional bank for a loan, it is now possible to go straight to investors to support a project or company. And while their applications range from family and friends funding to fan and patron funding, the number of crowdfunding platforms has multiplied over the years.
3. Blockchain and Cryptocurrency
Cryptocurrency and blockchain are typical examples of fintech in action.
Cryptocurrency exchanges like Coinbase and Gemini connect users to buying or selling cryptocurrencies like bitcoin or litecoin.
But in addition to crypto, blockchain services like BlockVerify help reduce fraud by keeping provenance data on the blockchain. And while cryptocurrency and even blockchain may be somewhat controversial uses of fintech, they have certainly taken parts of the investment world by storm in recent years.
4. Mobile Payments
It seems as though everyone with a smartphone uses some form of mobile payment. In fact, according to Statistics, the global mobile payment market is on track to surpass $1 trillion in 2019.
Using increasingly sophisticated technology, services have emerged that allow consumers to exchange money and payments online or on mobile devices.
5. Insurance
Fintech has even disrupted the insurance industry. In fact, insurtech (as it's been so-called) has come to include everything from car insurance to home insurance and data protection.
Impact of FinTech on Personal Finance
Fintech apps have indeed transformed the way we manage our finances and our decisions towards spending, budgeting, saving, investing and more, by offering us very convenient and easily accessible solutions. Below are a few impacts that FinTech have on our personal finances:
- Simplified Account Management:
With the introduction of Fintech apps, management of more than one financial account has been made a lot easier. With this individuals can now have certain accounts for certain purposes. Fintech apps have provided customers the golden opportunity to have access to loans, credit cards, bank cards, make investments, make local transfers for purchases, international transfers and so on, just in one app.
With FinTech there is now no need for manual record keeping of financial expenses as records can be retrieved when needed from your financial app, this also aids better decision making when spending.
- Budgeting and Expense Tracking:
Fintech apps provides users the access to accurate budgeting tools, this could help to set goals, categorize your expenses, set limits for your spending per day and get notified on your spending style.
These features on FinTech apps gives you a better understanding of how you spend, thereby enhancing your decision making process, saving more and spending less and achieve your financial needs.
- Uninterrupted mobile payments:
With FinTech apps payment for purchases has become a lot easier it is simply done with a few clicks and that's all, it has really affected our use of cash, reliance on cash and other traditional methods.intech apps have transformed the way we make payments.
These FinTech apps are simply very reliable and secure , as you could have a pass code to making any transactions, it is also very quick, with a user friendly interface making it a lot easier to operate.
The Future of FinTech
The next few years look to be bright for the fintech industry. Advances in artificial intelligence and data handling and analytics will drive even more innovation in the sector.
Open banking practices and an increase in the number of financial data APIs will drive even more fintech application development. Blockchain projects have the potential to catalyze rapid evolution in the banking industry and beyond.
Conclusion
Fintech has revolutionized many different markets, most notably the banking, trading, insurance, and risk management industries. Fintech companies, which include startups, technology companies, and established financial institutions, utilize emerging technologies, such as big data, artificial intelligence, blockchain, and edge computing to make financial services more accessible and more efficient.
