Financial Technology, or FinTech, is a very young industry though growing at an exponential speed. It basically involves companies that make use of various technologies to better their financial systems. In other words, FinTech largely associates itself with the financial sector and includes all possible innovations in retail banking, investments, financial literacy and education, even bitcoin. In fact, you may call it a digital revolution in the financial sector.
Before I further share my thoughts on how this industry is growing, let us consider these stats –
Such figures clearly focus on the growing importance of FinTech for businesses. What is more interesting is that these days FinTech is no longer limited to serving only the established financial companies but has also paved way for several startups to begin operations in this area by offering innovative technologies, such as alternative lending, wealth management, or else someone like Square which made a name in the payment processing arena with innovative smartphone card swiper Technology.
In some or other form, financial services industry has been leveraging AI/ machine learning since quite some time now. With the proliferation of Big Data, the industry is seeing a radical transformation through advanced analytics. This combination of AI and Big Data promises to bring on board some innovative and smarter solutions.
AI primarily boosts the benefits a financial software can normally offer. For instance, an AI-powered software can deliver more personalized financial services, investment advice, retail financial planning, and so on. These areas, otherwise, demand much more manpower and can be less personal. With AI, there is lesser risk of fraudulent activities, ease in monitoring data entry tasks, and make financial decision-making much simpler.
AI also offers a lot of consumer-level applications for smoother user experiences. The AI-enabled personal finance applications can balance people’s budgets based on their specific behavior patterns. For traders, AI acts as robotic advisors and offers them assistance in managing their stock portfolios.
Big Data, too, has played a major role in the success story of FinTech. Cognitive technology under Big Data, such as relationship analysis and language comprehension, are just some of the ways FinTech is leveraging the power of Big Data.
One of the main sectors that has been positively impacted with Big Data is lending and credit scoring.
