Technology is constantly changing the way the world works, including the way we use money. In recent years, the way people and businesses manage and receive money has changed significantly. FinTech, or financial technology, is a large part of the massive shift in the industry. Apps, websites, and new forms of currency have all disrupted the economic field.
FinTech usually refers to a type of program or software that provides financial services to businesses or individuals. So far, FinTech has reached all corners of the financial industry, from investing and lending to banking and insurance. FinTech promises to review and solve several of the problems that banks and financial institutions have faced in the past.
Problems FinTech Will Solve
There are many advantages of FinTech, as the technology has helped solve numerous issues that both businesses and consumers face. A few of FinTech’s capabilities and the issues it has worked to review and solve include:
1. Access to Payment Options
The consumers of today can access more payment options than ever before. From writing a check to using a credit card, with the ability to pay in different currencies, online transactions are becoming more and more accessible. In the past, companies wanting to accept multiple forms of online payment had to assume some level of risk and rely on a variety of payment processors and pay high fees to keep themselves safe.
FinTech is helping broaden the payment options available to both individuals and businesses, expand the list of payment methods businesses can accept, and increase online financial security.
2. Security Concerns
People are worried about the security of their financial information now more than ever. The security measures often used to protect data, such as PINs, might not always be as secure as you’d expect. It is relatively easy for hackers to guess a four or six-digit number. However, FinTech is helping to solve security worries by integrating biometric security measurements into certain programs to ensure top-level protection.
3. Limited Access to Financing
FinTech programs can remove many of the traditional barriers when obtaining funding. This allows access to loans for smaller companies or individuals to achieve their entrepreneurship goals. Along with providing an alternative path to financing to those who may be turned down by a bank or lender, FinTech-enabled, peer-to-peer lending platforms will also aim to make loans more affordable through easier payment plans to pay off debts.
4. Reaching the Unbanked
As of 2017, around 1.7 billion people worldwide did not have a bank account. Although the amount of “unbanked” people has fallen in recent years, more than one-quarter of the global population still falls under the “unbanked” category. There are numerous reasons why people don’t open a bank account, but the primary one is that they don’t have enough money to do so.
FinTech can help to make the financial industry more inclusive by expanding the range of financial services available and by further opening access to financial services. Moreover, offering individuals who are not traditional bank customers options for saving will benefit those individuals and demonstrates one of the pros of FinTech for financial institutions. Expanding access to banking increases a bank’s or financial institution’s customer base.
Macropay Will Keep You Up to Date
The innovations of FinTech have become more and more prevalent in aiding current financial problems. Macropay can help you keep up to date with FinTech innovations with their expert consultancy and advisory services. Contact the team at Macropay to find the right solution for your current problems.