Fintech is a retrench of Financial Technology. Fintech is a modern tech that claims to simplify our payment methods to improve and integrate our payment process. Financial technology was brought in 2005 and was innovated by Chris Skinner. It took several years to get successful use of this technology. Nowadays, it has become more famous for some Banking Startups; those are claiming to be beyond banking like Rapipay, Bharatpay, etc
Fintech: A simple Definition
Fintech is the technology that improves our day-to-day financial transactions, provides more security, and delivers different financial bits of help and services. Financial Technology (Fintech) uses some automated way of software and algorithms.
The main Fintech is not the front end like we can see; it is based on the backend. Fintech is now evolving and spreading in its way and captures different sectors;
- Banking
- Fund Raising
- UPI Transactions
- Education Sector
- Investment Management
Now let’s see some emerging startups some companies of Fintech so that we can relate with this technology.
Fintech Companies / Startups
Bharat Pay:
Famous Fintech Indian Companie is Bharat Pay. Founder Ashneer Grover and Co-Founder Shasvat Nakrani. It’s all one app for any UPI transaction. Mainly used by Merchants to accept any transaction from the buyers. Also, Their main model is the loan sanctioning model that is also based on FINTECH.
Pine Labs:
Another Famous fintech Indian Companie is Pine Lab. Founded in 1998 by Rajul Garg, Tarun Uday. This giant company has served on financial tech-based services for decades. The main Regional area they are focusing on is INDIA, the Middle East, and Southeast Asia. They build a community and loyalty between the merchants, concentrate on Transactions QR codes, also offer loans.
Rapipay:
Rapipay focuses on the Banking sector but is claimed to a beyond banking. They were established in 2009 by the founder Nipin Jain. They launched some micro ATM, Payment banks approved by RBI.
Other companies are well-known Paytm, Razorpay, Bill Desk, etc. After a couple of weeks, we’ll discuss their business models.
Fintech and Modern Tech:
Now we understand a little bit about Financial technologies. Let’s know their combination with modern tech. Here are some modern innovations that revolve around Fintech with AI’s and Blockchain.
1. Cryptocurrency: This is a beautiful example of modern tech. Decentralized currency means Cryptocurrency. This is fully based on Fintech and Blockchain technology, and its price depends upon the Demand and Supply Ratio.
2. Smart Contracts: Another application of Fintech and Blockchain Technology. This is a fully automated contract between seller and buyer directly written on codes. The smart contract is fully secured and processed by blockchain technology.
3. Other important uses are Open Banking, Investment advisor, Cybersecurity, etc.
What Causes the Emerging Trend of Financial Technology (Fintech) in Asia
- Fintech was invented in the early ’20s, but when the emerging “technology” trend started in Asia, we mainly focused on solving Financial problems. The fintech adoption rate of the past 5 to 6 years is increased by 85%, and the market has become $8 billion.
- Payments apps are capturing the markets exponentially day by day. The payment apps now focus on Big Data ( A bank of user data to determine their usage trend and understand their mindset). Big giant companies are coming in this trend like Amazon, Whatsapp, Google. This affects the user to adapt to the fintech.
Big data may be cheap to collect, but it’s expensive if you don’t know what you want to get out of it
Ozge Yeloglu, Microsoft
- Globally 187 companies are based on Fintech, and they provide all financial solutions. 18 Unicorns companies are Indian and mainly based on Banking, Insurance, Lending, Payment, helping to save taxes and cutting the third party commission on each sector.
- Last and major reason for Government initiatives and huge exponential demographic demand, Population increase and improving internet segment and huge e-commerce market. Fintech is only a tech that every sector every element has the requirements.
The Pros and Cons About Fintech:
Pros of Fintech:
We already understand the benefits of fintech so let’s summarise the benefits of Financial Technology.
- Reduce Costs
- Transaction speed Increase
- Server Security
- A.I Driven Advisor
- Risk Management
These are the main benefits of this technology.
Cons of Fintech
Some companies are taking these advantages and making frauds
- Low Transparency
- security Breaches
Only these 2 are the main risky factors of fintech. But Here is The Solution
Solutions:
- Make transactions only on well-known sites.
- Don’t save your card or bank details on any site
- Before making a transaction, always authenticate your security
- If any fraud happens, then contact your bank or Follow RBI guidelines.
Why Fintech is the Future:
Fintech provides us with a better product and the best solution for solving financial problems. The fintech industry is increasing by 6% CAGR. They are mainly working on BIG DATA, AI-Driven areas, Machine learning, etc. These will be replacing our general financial transactions and capturing the market. This will take time and depends on our adaptation. Fintech learning is important because of the future. Also, if you focus on your career, fintech will be a great choice. It is an excellent career option to build in it. It is a well-paid sector and very demanding.
Conclusion:-
Last but not least, here we are the conclusion of financial technology. This is for beginners guide of fintech, pros, and cons you learn about fintech means. We are the fintech learner; if you want to get more articles and podcasts like this, set this Fintech Learner to your bookmark.
Your time is everything for me. Thanks for it. Best of luck with your Fintech Journey.