Whenever you pay for a bus ticket online through PayPal, Google Wallet or even just your credit card, you’re using FinTech.
Every time you make an online transaction through your bank of choice smartphone app, you’re also using FinTech.
What FinTech stands for is, quite simply, “Financial Technologies”. It is the use of technology to deliver financial services and products to consumers; the web that weaves between cloud-conducted financial transactions and processes.
FinTech not only affects banking transactions – it’s also involved in the insurance and investment industry. When you go online to calculate the mortgage for that dream home you’ve been wanting, or refinancing the one you’ve already got, you’re using FinTech.
Even though the name of it may be a new invention, technology has always been part of the financing sector. Ever since the financial crisis of 2008, FinTech has turned into a reshaping factor of commerce, payments, investment, asset management, insurance, clearance and even the way in which we handle money itself, with cryptocurrencies blasting into the scene.
If you look at the way in which banks spend their money today, they could be considered technology companies and with customers expecting and demanding services brought into their lives by FinTech, such as free person to person payments and digital onboarding, the scenery won’t be changing anytime soon.
What Fintech Means For The Consumer
There are many ways in which FinTech affects the way the finance world works and the customer experience. The growth of online shopping for example, is pushing harder and harder for the dominance of online, cashless solutions and transactions.
FinTech has allowed for products to be easily and quickly accessible for consumers. FinTech companies collect information from the customer in an effort to offer them adjustments of product selections that closer fit their exact needs, thus making purchasing decisions better and products and services more personalized.
By having businesses not needing to invest more in physical infrastructures means that they can offer clients cheaper deals.
With the disruption of FinTech in the insurance industry, insurance products are now becoming more tailored to customers who are, in turn, demanding them to cover specific locations, uses or timeframes. This makes it necessary for insurance companies to collect and analyze more and more data from their consumers. This same thing is happening all throughout commerce, retail, banking and investment industries.
For the everyday consumer, this raises the question of what exactly is being done with all of that data and where and who is collecting it.
Protecting The Consumer’s Rights
Since so many FinTech companies can work with their own new and different business models than those of traditional providers, makes it harder to ascertain which are regulated. Now that consumers have become more exposed to technology-based risks, such as cybercrime and the misuse of personal data, it is also harder to know how consumer’s rights are being protected.
With the growth and expansion of FinTech becoming greater in the foreseeable future, there are definite assessments and improvements to be made, especially regarding consumer data. The security of it, the way it is being used, and by whom are things that the everyday consumer should be paying attention to.
Regardless, there’s no denying that FinTech has revolutionized the way we handle our finance transactions. FinTech’s advancements will continue to bring advantages and new challenges to the industry.