FinTech, also referred to as financial technology, is a new type of innovation that tries to compete with the old methods of providing banking and financial services. Examples of such technologies include cryptocurrencies and crowdsourcing.
Fintech, in its simplest terms, is just technology used to enhance the delivery of financial services. The phrase only became popular in the twenty-first century, but it has influenced how people handle money for well over a century.
Any innovation that includes financial transactions, whether for personal or professional usage, falls under the umbrella of financial technology. Since the invention of the credit card in the 1950s and the ATM in the 1960s, fintech has been overtaking our world.
Fintech used to be exclusively associated with the banks or stock trading firms. The growth of mobile computers and the Internet explosion have made fintech an ongoing global revolution.
Fintech is the term for the process through which financial services providers utilize technology to enhance the usability and delivery of their products to customers.
It essentially functions by extracting/removing these companies’ products and opening new markets for them.
The way financial services companies conduct business is being transformed by financial technology, or fintech. Businesses in the Middle East are quickly embracing digitalization and placing the needs of their consumers first using tools like voice, data, and AI.
Projected value of global fintech market by 2023.
CAGR growth of fintech
in the Middle East.
in the GCC.
FinTech (Financial Technology Sector), is one of the most complicated and quickly growing sectors of the modern economy. The part that technology plays in organizing and allocating money is expanding as more and more of the economy becomes irrelevant. Even for the biggest businesses in the sector, navigating this environment can be challenging. Technical documentation from both the software providers’ and the regulators’ sides must be well understood. The Financial technology can also be called as Fintech is one of the complicated and quickly growing sectors of the modern economy, fintech is easy method of handling finance through AI.
The 2008 global financial crisis was well acknowledged to have completely turned upside down the financial system as we knew it. Customers lost their homes and funds because of bankers’ dishonest and occasionally criminal activities, but the government also cracked down on risk-taking. They achieved this by setting capital requirements and, in certain instances, by requiring banks to ring-fence capital, a technique used by banks to safeguard assets from unfavorable conditions and rules in nations that are particularly vulnerable and high-risk.Therefore, it is not too surprising and unexpected that consumers, businesses, and governments began to view financial sector participants with suspicion.
This loss of faith in well-established financial actors paved the way for new financial technologies firms and practices, especially when combined with advancements in new technologies and everyday digital tools like cellphone
DIFFERNCE BETWEEN FINTECH AND BANK:
The phrase “fintech” refers to modern technology that simplifies and automates the provision of financial services. It focuses on creating a smooth consumer experience through practicality, usability, flexibility, and accessibility. As a result of using technical trends and breakthroughs, it has a wider market distribution.
Banks, on the other hand, are financial institutions that are authorized to lend money and take deposits from their clients. They concentrate on security and the control of financial risks, which limits their market reach.
|PURPOSE||Focus on making the customer experience seamless through convenience, functionality, personalization and accessibility.||Focus on security and the management of financial risks.|
|POTENTIAL COVERAGE||Has a larger market distribution due to the use of technological trends and advancements such as smartphones||Has a limited market distribution|
|STRUCTURE||Has organizational structures with fewer barriers to trends which encourages innovation||Has a rigid organizational structure that may restrict quick rolling of innovation changes|
|TECHNOLOGICAL RELIANCE||Relies heavily on technology||Does not rely heavily on technology advancements|
|TARGET CUSTOMERS||Targets the un bankable such as those with low credit ratings||Targets customers with proven track records as well as strong credit ratings|
|COLLATERAL||Has lenient and flexible collateral requirements||
Banks have strict collateral requirements