Fintech: Financial Services for Everyone
Digital revolution is creating new socio-economic opportunities and is expected to create more in the future. The process of digitization of our private and professional lives is unstoppable just the same as the idea of globalization. The advent of the internet has laid the foundation for the globalization of ideas and products. Digital interconnection has allowed people to share ideas and discoveries using the common platform of the internet. It has also provided people with freedom of information, professional opportunities, educational resources and technology updates. Nowadays, anyone who is connected to the internet, can contribute interactively to global communities and make relationships with people located anywhere in the world.
However, it is clear that if current participants of the market won’t adapt to the changes, they will soon be kicked out of the market. On the other side, digitization has created new opportunities and eliminated the monopoly of market giants to an extent. This has also added competitive pressure on existing players which leads to improved standards and better products. Hypercompetitive environments also help in exposing the vulnerabilities and areas of improvements in existing firms and products.
The Game Changers:
Firms primarily use the internet to make their product market based and to target a wide range of audiences for their product. Let us take the example of the music industry. Musicians use digital platforms to promote and sell their products to the global audience. Digitization has also transformed the means of publishing and mass media. The financial sector is also no exception to the transforming waves of digitization. Online payment solutions, credit cards, and online banking are a few examples of digitization in the financial sector. These services, also known as fintech services, have also helped business to attract customers and to build their place in the market.
The blockchain is the game changer for financial services. The use of blockchain technology has contributed heavily to making the transactions transparent. Banks have their online applications that allow users to access their accounts from anywhere in the world. The approval of applications, allowance of loans and global transactions are just a matter of minutes due to these applications. Companies are also using the data to improve their services. Blockchain technology allows business parties to interact with each other without relying on the third party services. The introduction of smartphones gave users the access to financial services from their smartphone apps. This paved the way for interactive and real-time banking services. Today, people don’t have to visit banks and wait for their turn to get assisted. Mobile phone banking gained more popularity with the launch of smartphone apps. These apps feature the options of fund transfer, investments and do online shopping.
Companies are using chatbots for consumer service based on artificial intelligence techniques. These bots learn from their interaction with customers. These bots can easily handle common queries and even help customers by giving advice based on its database. The use of chatbots has raised the standards of consumer satisfaction. The use of artificial intelligence is also used by companies to detect frauds in collaboration with anti-money laundering departments. The process of detection also includes the use of human efforts along with the use of dedicated software. The software detects any flaw in the system or distraction from the normal processing and sends an alert to the department of investigation. The officers of investigation department try to figure out whether the threat was real or not. Machine learning algorithms use prior records to generate alerts of possible attacks even before they actually happen.
In Digital Championship Cyprus 2016–2017, Lykke, a Swiss fintech company won the Fintech Company of the Year award. The Swiss Company is planning for the fourth industrial revolution by building a global marketplace for the trading of all sorts of financial assets at one place. The CEO of Lykke Cyprus Dr. Demetrios Zamboglou, who is also the Chief Business Development Officer, is using all his abilities as well as business relationships to get all the stakeholders of the market on the same page. Dr. Zamboglou is aware of the importance of trust and transparency for the creation of a global marketplace. The use of blockchain technology for transactions is making the process of transactions free of corruption and mishandling.
The Prospects of Fintech:
Based on the analysis of recent trends in the industry, it is predicted that finetch companies will continue to grow in the near future. Fintech companies are raising the standards of consumer satisfaction and exposing inefficient traditional banking services which are unable to meet the needs of today’s consumers. Unfortunately, the financial freedom has its disadvantages too. It allows people with evil purposes to exchange illegal money without the risk of being hunt down by the authorities. This has made the security of these transactions unclear along with the liabilities of getting hacked. Apart from the vulnerabilities, progressive companies will work to make it better and reduce security concerns. The time calls for a balance between freedom and tracking the money.
Nowadays, easy access and fast transactions have motivated several new businesses and many existing companies are also offering online financial services along with traditional services to keep their customers intact. It is obvious that transparency will determine the success of fintech companies. The fintech companies have also forced traditional banking companies to improve their services and user experience. The competition will definitely help customers to receive better treatment and enhanced services. Unquestionably, Fintech companies will be on upsurge in the near future and more new fintech companies are expected to enter the scene. The involvement of illegal money is the only threat to the future of fintech as criminals can also use this platform to send and receive untrackable big chunks of money for their evil purposes. The data of customers should not be shared with other parties without user consent. On the horizon, fintech companies are expected to replace traditional banking and provide people with a better user experience.