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7 Applications of FinTech Technology You Must Know

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FinTech, also known as financial technology, refers to mobile applications, software, and various technologies meant to enhance traditional financial businesses. It incorporates everything from compound blockchain networks to mobile payment apps. The financial sector has readily adopted fintech and continually awaits the next level of computation power. Technology aids companies in solving human problems and increasing efficiency. As a result, financial services are more accessible for people, and individuals can deal with money with less hassle.

FinTech application development companies create apps by emerging with new technologies. These technologies include AI, Machine Learning, Big Data Analytics, Neural Networks, and evolutionary algorithms. FinTech technologies bring the connection lost in the industry between bankers and clients. The technologies can process large customer data, making it easy to give customers the desired results. Bankers can easily find what is right for the customers and satisfy them. You will learn about the seven applications of fintech you must know in this article.

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1. The Neighborhood Bank

The Neighborhood Bank is consumer banking that will be the center of disrupting the financial industry in the coming years. Technology will create dramatic shifts in where and how people conduct banking. Business models such as having branches in every town will change. The transition will be caused by the dwindling number of services requiring one to visit a bank physically.

Most customers are seeking seamless management of their finances. They want services available on their mobile like other facets of modern life. These expectations are realistic and set on how they see applications transform other areas in their life. Here is where FinTech applications come in. Implementing this technology can change the entire banking ecosystem and ensure customer satisfaction.

 

2. Investment Advice/Robo Advisors

One of the key promises of FinTech is to provide financial services to everyone or extend their reach as much as possible. It is worth noting that the financial sector has taken important steps toward achieving equality. Before technological and regulatory breakthroughs in the 1970s, the high costs of conducting trade made investment available as a preserve of the rich. Regulatory changes in the ‘80s and ‘90s saw different customers execute their trades. Yet, trading necessitated a high understanding of how the market operated.

The last decade has seen the rise of new technologies in the financial sector, including Robo-advisors. These technologies have democratized investing, as everyone can use computer programs that give automated investment advice. Robo-advising has altered investment patterns resoundingly. In some instances, they are proving more likely to steer customers’ finances into long-term plays in low-risk index funds.

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3. Apartment Rentals

The rental market in cities like New York has been daunting to most people seeking residence. Most landlords ask renters to have a co-signer or incomes way higher than their monthly rent. Hence, due to such limitations, many face the challenge of getting the apartment they desire. Julien Bonneville had the same experience when he came from France to study at the Columbia Business School. He later decided to create a company that would use financial technology to allow potential renters to take a lease with a modest income and no credit history.

TheGuarantors is an example of a FinTech app that runs on a B2B model. Here landlords in New York sign up for the services of the company. The app cosigns the apartment if a renter does not have a guarantor. It issues the landlord a bond backed up by an insurance company. This is the perfect example of how FinTech can be applied in such sectors.

4. Small Businesses

FinTech is playing a big role in the development of small businesses. The technology makes it easier for startups to secure loans, process payments, and manage payroll. Business services and payments were the first areas covered by the technology. Platforms such as Paypal allow secure money transmission while allowing businesses to avoid large transaction fees needed by credit card companies.

Another company that has made great significance in the payment processing arena is Square. It debuted its card-swiping attachments in 2009, allowing everyone to secure credit and debit transactions. Companies such as Square now serve previously overlooked customer segments in the financial realm.

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5. Children Saving Accounts

The FinTech revolution is being driven by more than technology. Some of the shifts resulting from changes in social norms around money. Some companies, for instance, are making it possible for parents to Crowdfund their children’s savings accounts. This is possible due to FinTech technology and the shift of attitudes toward money, especially by millennials.

6. Currency

FinTech will change the way you view and use money. It will turn the concept of money into something new, and there may be a time when cash will be obsolete. As things stand, hard cash will face more competition from digital currencies thanks to blockchain. The technology allows reliable use of crypto, creating space for decentralized electronic asset exchange.

For these reasons, many businesses are continuously adopting crypto payments. Investors are also putting their money into companies facilitating digital currencies. Blockchain technology might upend finance, but it is a matter of patience. It will take some time to dislodge current habits and constructs quickly.

7. Economic Equity and Access

Many FinTech entrepreneurs seek to create opportunities for those who might have previously not had the chance. Numerous entrants in the FinTech field are giving long-tenured financial institutions a run for their money. There are many interesting innovations from the customer side of things, and big firms are not the gatekeepers.

The elimination of gatekeepers helps in addressing the longstanding access and equity challenge. FinTech companies are expanding the availability of financial transactions, which have been difficult for most people to access. There are also startups seeking to challenge economic disparities head-on.

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Conclusion

The future of fintech has no limit. Yet finance varies in the industries upended by technology in recent years. It is more closely regulated than other sectors, and every fintech company is responsible for the financial well-being and customer’s money at some point in its interaction with them. Both big companies and startups are focusing on technologies with long-term potential. The investment rate in fintech means they will have investor and time interest.

Technology will be the key to surpassing the basic businesses of financial service companies. You will see more AI in banks as institutions try to streamline the customer experience. Many opportunities lie ahead, along with new challenges. Still, expect finance to have more technology embedded in it as time progresses.

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