What you should know about Fintech and how it has disrupted the banking system
Do you know what Fintech means? A lot of people have heard about Fintech and they do not know what it is about. It is the biggest buzz in the financial industry combining finance and technology which has become a major concern for banks and other financial institution. FIntech is an abbreviation for financial technology. In the past, the banks were the major institute for finance and other money related commodities, but in the last 10 years, there have been a disruption in the financial world where the consumers are starting to understand what their money is meant for and the value for every penny put in by combining data and technology. In case you did not know, Elon Musk was the first to take fintech to the public as he wanted to revolutionize the payment and transfers using Paypal.
Unlike the traditional banks that were involved in doing all the transactions related to money and other financial commodities, Fintech companies do each of them and do it perfectly like a fintech company might decide to face only loan, another decide to face only investment, others face only payments for store and buying online, others include trading platforms and a lot do crowd funding, as well as insurance and blockchain. Fintech has been growing very fast as a lot of people have been able to do virtually all transaction from their comfort while those who did not have access to banking now have access to it.
In the past, a lot of people did not have access to finance easily and the banks were charging them extremely high for transactions but with a lot of Fintech companies, there have been zero transaction fees, also it has allowed a lot of people not to hold cash, rather just use simple chatting apps and scans to pay. The way Wechat can be used to pay for goods as they chat and others using scanning to pay for goods like mPesa.
Although Fintech is the revolution of the traditional banking system and financial institution, the fact that everything is done online is a problem as it is prone to cyber security and attacks from scammers and hackers. Data is good but when data is lost, it can be very dangerous but it is certain that in the future, security will be taking as priority.