If you are a business owner, a financial advisor, or an average consumer you might have come across the word fintech. Fintech is an anagram for the words finance and technology. The term encompasses everything related to financial technology and has recently become widely popular due to its influence on the market.
Today we will be answering the question “what is Fintech exactly?” and discussing its effects on the industry.
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Understanding the Meaning of Fintech
The word fintech first got popular in the early 21st century when most of the financial aspects of an institute were managed through traditional methods. Time-consuming software and large chunky computers were used to perform finance-related tasks.
Over the years, financial technology has evolved to become much more efficient and powerful. As of now, fintech includes the management and control of finance-related tasks, processes, and software.
This is not limited to the finance industry only but also expands to other industries including banking, education, and even cryptocurrency.
Why Fintech Became so Popular
It is no wonder that the financial processes currently in use are extremely outdated, complicated, and time-consuming for the average person. The simple process of buying a house, taking out a loan, or doing your taxes requires you to understand complicated procedures and tricks to save any money.
The average person ends up losing a lot of money and time navigating through the paperwork and demands. Fintech companies and institutes are creating new and improved software and services to combat these traditional methods.
One of the things that makes fintech so great is the increased accessibility and convenience it provides. Whereas previously you needed large computer systems to do trading or travel to a physical location to make a payment, you can now do this and much more from the convenience of your smartphone.
Fintech in Action
In a world of innovation and technology, fintech is revolutionizing the way we deal with financial tasks. Some great examples of fintech are the metaverse and cryptocurrencies. The entire objective of cryptocurrency is to create a decentralized system that is not controlled by the government or people in power so that the average consumer can have greater control over their wealth.
It’s no surprise that currencies like Bitcoin and Ethereum are becoming popular. Despite being a massive industry, the crypto-world is only but a fragment of fintech. The entire stock market and market capitalization also fall under fintech. The multi-trillion dollar market includes thousands of companies that have gone public and allow people to buy its shares.
Another excellent example of a fintech company improving the way we handle our financial tasks is the company Affirm. Affirm has been working to improve online purchases by providing quick loans to consumers. They aim to combat traditional credit card companies that work on credit scores and history.
Final Words on Fintech
Fintech is changing the way we look at wealth and finance. The industry is evolving at a fast pace and we can expect improved and life-changing services and products in the future. The common man has long been cut off from being in charge of his finances, it’s about time that fintech brings the average consumer back in the driver’s seat. Let’s see what the future holds and stay tuned to Financicles.com for the latest information on the sector.