It is evident that FinTech is changing consumers’ way of banking, whether it is with virtual assistance, digital payments, or even socially conscious alternatives to traditional banking. Randall Castillo Ortega, the founder of RACO Investment and an expert in finance, explains how FinTech is changing the financial ecosystem.
In spite of the fact that tools like multi-factor authentication and digital payment are not new, new technology is continually being developed across the globe. Fintech has become an integral part of consumers’ lives. In addition to providing convenience to consumers, these FinTech trends are also protecting them from fraud.
In addition to revolutionizing the financial ecosystem, FinTech is creating new opportunities for financial service providers and transforming the way people interact with their finances. In addition to offering individuals access to and management of their finances in a more straightforward manner, FinTech is also providing companies with new financial management tools.
Moreover, it is helping to develop new financial products and services that are more convenient and efficient than traditional ones. Explains Castillo, “The products and services are typically more affordable and tailored to the needs of the consumer. FinTech is not only providing access to financial data and insights, but it’s also making the financial system more transparent and secure.”
Often, FinTech companies are at the forefront of the development of greener finance. As environmental issues become more prevalent, new solutions will emerge — and they are often at the forefront of making finance more sustainable. Banking somewhere that values global impact over profits and is eco-friendly has never been easier these days.
The trend in recent years has been to allow employees to receive their paychecks early, but some FinTechs are taking it one step further and allowing it almost whenever they want.
Employers now work with FinTechs to allow workers to access their earned pay whenever they want, in addition to earlier access to paychecks. If overdrafts occur, bills need to be paid, and early payday loans are avoided, this can be extremely helpful.
By using artificial intelligence (AI), machine learning, and automation, banks and consumers approach financing in a completely new way. The World Economic Forum published a report in 2020 that found that 90% of FinTech companies and 80% of traditional banks have used some form of artificial intelligence. In particular, 56% of all firms are already using AI for risk management, while 39% are either in the process of implementing AI or plan to do so soon.
By harvesting the power of AI, banks and FinTech companies are able to offer more protection for their customers’ finances. AI technology has become a staple in evaluating risk, as well as detecting and preventing money laundering and payment fraud. As a result, consumers can rest assured that they are receiving higher levels of security when it comes to their financials.
The Metaverse and Oculus Quest introduced simulated experiences that were more advanced and accessible, and virtual reality (VR) is now becoming a frequent topic in FinTech discussions. As VR technology takes banking one step beyond virtual assistants and automated transactions, consumers can have a much more immersive banking experience without having to leave home.
Almost every year, new technology emerges that changes the norms in banking and finance. Decades ago, concepts like sending money via an app to a friend or utilizing a mobile wallet were unimaginable. There is no doubt that these developments are important to our daily lives, but they are often taken for granted.
While new technologies are not perfect, like their creators, it often takes years for them to be fine-tuned. These innovations could enhance financial security and ease over the long run, as well as add convenience and security to consumers’ finances.