The unique selling proposition of business entities and firms in the financial services industry is the ideal integration of great customer value with convenience. Research shows that almost 6.378 billion people use smartphones and the latest technologies, and by 2025 the number of users is expected to reach 7.33 billion. The entrance of technological advancements emerging every day demands from corporations and financial organizations to enhance their scalability, to operate all across the globe, in order to cater to large segments of the market.
FinTech constantly introduces innovative technologies for individuals who are looking for convenient online services to perform their tasks swiftly and with greater precision. There are a plethora of industries and services born and transformed due to digital innovations such as cryptocurrencies, online banking, Insurtech, P2P trading, IDV services, and so on. To name a few:
Online Banking and Funding Platforms
For expanding and conducting business globally, multiple transactions take place on a frequent basis. The entire game of payments industry has been reconstructed through the aid of the internet and cellular technology where the transaction gets processed and validated in a second. The course of shifting from the traditional model of operations to online mediums has been a smooth journey due to the user-friendly interfaces of AI-powered systems. The machine learning algorithms of the intelligence model of online solutions learn, recognize skeptical patterns, and flags suspicious transactions in a second.
The time spent between requesting a loan from banks and in its sanctioning requires extensive document verification and investigation, even in this digital age, it can be time-consuming and hectic for customers. FinTech has brought a perfect alternative for funding seekers, many money lending platforms have emerged in past years where potential startups or employees request a certain amount of loan in order to initiate their business activities and accomplish short and long-term goals. The funding platform provides requested loans to the needy on the basis of the person’s documents and a couple of choices are presented to the person, different loan amounts coupled with varying interest. It does not involve any paperwork and unlike regular banks, loans get sanctioned in minutes. Some platforms don’t even require extensive documentation, loans can be sanctioned on the providence of Bank Verification Number (BVN).
ID verification Industry
Digitally opening an account and making online transactions is not a recently introduced service. However, tons of KYC compliance issues reported repeatedly call for new inventive ways of validating an individual’s identity and ensuring risk-free customer onboarding. For instance, Standard Chartered was charged $1.1 Billion for poor AML screening in April 2020. Similarly, on Oct, 21, Credit Sussie had to pay $700 million to authorities for not keeping compliance procedures up to the mark.
FinTech every year comes up with fresh technologies to equip firms and banks to authenticate the ID of the beneficiaries and reduce risk to zero. There are multiple ways of verifying the identities of customers such as online biometric verification, facial recognition technology, video KYC, NFC technology: authenticating chip-based documents, and much more to make online transactions seamless and reliable. The advanced solutions contain a user-friendly interface and most of them don’t need to be separately installed, it operates in regular browsers due to their seamless API integration.
The advent of virtual currencies has brought the financial industry to a whole different level. The monetary funds of an individual are more secure. Most importantly, the financial transaction takes place without the involvement of a third central party and saves a lot of time and attention for users. With users joining different virtual currency platforms, looking at it as a safe investment option. It is expected to become a global economy, it is to be believed that cryptocurrencies will be used in the future for the sale and purchase of commodities and services. If it becomes a globally used currency that everyone has invested in, a gateway of opportunities will open for the masses.
The initially introduced FinTech technology, Insurtech was not well received by insurance firms but over the last few years, firms have seen to be enthusiastically providing capital to insurtech startups. The technology comes up with efficient ways to acquire new sets of information through machine learning, artificial intelligence, and social media accounts of policyholders for making productive customized policies for individuals. Insurtech offers customers wearables, apps, and claim processing tools, and much more. The automated processing upscales the operability of insurance firms. It helps to tap new segments of customers on ideal pricing.
It is beneficial in multiple cases. For instance, a firm designing home security systems can find out how many houses are occupied in localities, which helps insurance firms to pitch their product to potential customers.
There are many apps that offer KYC services on a short-term basis. For instance, a person has borrowed a car from his acquaintance for a day. The automobile can be insured to reduce the risk of the lender to zero.
Blockchain (P2P Market)
The technology introduced by Fintech provides opportunities for people to keep their funds and investment security in a decentralized ledger. The information is incorporated in different blocks, all linked together. The trade-in network eliminates the need for middlemen. The ledger can track the trade and ownership of assets, everyone gets notified of trade and if any changes are made to the information stored in the block. It is hard to tamper with the information as any change disrupts the entire network.
Fintech has played a vital role in enabling firms in the corporate and financial industry to stay relevant in the constantly evolving business landscape and in making global leaders of the next generation. The experts of the payments and financial industry observe the changing customer behavior and habits and come up with innovative technologies for their convenience. The advent of online banking, virtual currencies, blockchain technology, insurance, and much more was possible due to a vision aided by technology. Fintech innovations have redesigned the structure of the financial industry. It is growing at a fast pace and is expected to enhance the industry on a whole new level.