Today, fintech is not a strange term for many people in banking and finance. In this article, we will introduce all you need to know about fintech – financial technology.
What is fintech?
Fintech or financial technology is defined as any technological innovation in financial services. Industry participants develop new technologies to disrupt traditional financial markets. Larger corporations are increasingly recognizing the need for software solutions. So, they turn to fintech to increase and improve their financial services.
Fintech today refers to a wide range of financial operations that may be performed without the help of a human, such as money transfers, check depositing with your smartphone, bypassing a bank office to apply for credit, obtaining funds for a company beginning, or monitoring your investments. Recently, fintech companies have been on the rise. According to statistics, in 2013 fintech was invested about 4 billion USD. By 2016 that number will increase to US $ 20 billion. And, it’s expected to increase to 120 billion in 2020.
Who are the target groups of financial technology?
A traditional financial market will consist of two parties: financial institutions (banks, investment, insurance, securities, financial companies, …) and customers. However, when it comes to fintech, there will be 3 parties that keep the interaction relationship:
These are independent companies specializing in information technology, providing new products and services in finance. Customers of Fintech companies may also be end-users and may also be financial institutions. Firms like Personal Capital and Lending Club are examples of FinTech companies that have arisen in the last decade. They create innovative twists on financial concepts and give consumers greater control over their financial results.
Financial institutions (FIs) are businesses that participate in financial and monetary activities such as deposits, loans, investments, and currency exchange. This is an important entity in the whole financial industry. Because of the importance of technology, institutions increasingly collaborate extensively with fintech companies. On the other hand, these institutions also directly invest in fintech companies or research activities. Since then, institutions have embraced new technology to dominate the market.
Vietnam State Bank is a financial institution
Customers are users of financial services products. In the fierce competition between institutions or companies, customers get more benefits. Financial solutions are now more accessible to customers thanks to technological advancements.
The main products that financial technology bring
Based on the target users, the products in fintech are divided into 2 different groups. Include:
It’s products for consumers. The goal is to improve the way individuals borrow, manage money and fund startups. It makes people’s lives easier and faster.
It’s back-office technology products. This product group supports the activities of financial institutions as well as fintech companies.
In fact, services are served such as lending, money transfer, payment, … Fintech also offers many more extensive services, such as peer to peer lending, crowdfunding, personal finance, data management, insurtech, crypto blockchain, …
Fintech Vietnam Start-up Map 2019
What is the impact of Fintech?
Alter distribution channel and traditional financial services products
Altering the traditional product distribution channel is the most prominent impact of Fintech. It’s created internet sales channels such as mobile Banking, tablet Banking, social networks, digital banking development, paperless process, … Fintech has changed the transaction method and distribution channel in traditional finance.
Provide diverse services to users
In addition, services are served such as payment, lending, money transfer, … Fintech also provides more extensive services such as peer to peer lending, crowdfunding, personal finance, data management, insurtech, crypto blockchain, etc. So, Fintech service can meet more and more customers’ needs.
Collect big data
Financial technology can help collect and analyze large amounts of customer data. Through the collection of big data, financial bankers can reduce staffing costs and understand their customers better. At the same time, it helps improve service quality and customer satisfaction.
Financial and banking activities are fast and economical
Financial technology can change the whole market structure, product structure and simplify human labor. The trend of “paperless banks” helps financial transactions to be quick, transparent and economical. In addition, it also ensures the safety and minimizes risks for customers.
Creating competitiveness through technological superiority
Today, banks and financial companies are strictly competitive to get more customers. Fintech technology is the competitive advantage of banks. The leading unit of fintech technology application will achieve more success and profit. More and more banking start-ups can compete with big players based on fintech technology advantages.
Innotech Vietnam always strives to meet the needs of customers with the highest quality products and services. So we have received the trust from big companies such as ACB, Tyme Bank, Unifimoney, Manulife, Commonwealth Bank, … to use products created by Innotech Vietnam.
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