Fintech is the combination of financial technology and traditional financial services. It’s a relatively new industry, but it’s got huge potential for growth. Fintech is a term that stands for financial technology, and it refers to the use of technology in financial services.
Fintech can be used to provide customers with better products and services, including financial education, loans, and other types of financial support.
There are many types of fintech companies—from traditional banks that offer online banking platforms to online-only companies that provide alternative forms of credit scoring.
The way we interact with banks has changed dramatically over the last few decades, and fintech companies have been leading the way in this transformation. Some of these companies are disrupting traditional banking practices by providing cheaper or easier-to-use services, while others are using data analytics to revolutionize how money moves through the economy.
For instance, Kenyans can now easily access loans through Fintech services such us Mobile loans provided by companies such us Safaricom Mshwari, Tala, Branch, Timiza and so on.
The background history of Fintech
The history of Fintech is a long one, and it’s filled with breakthroughs that have made the world of finance better.
The first known use of the term “Fintech” was in 1987 by Coopers & Lybrand, an accounting firm in London. They applied it to describe their work in providing technology solutions to financial institutions. The term has been used by many different industries since then—not just accounting firms—to describe any company that uses technology to improve or change how people interact with money.
In 1989, a researcher named Kenichi Yua coined the phrase “financial innovation” when he published a paper called “Financial Innovation: An Outline.” He defined financial innovation as “the process of introducing new financial instruments or services into existing markets.” This definition has remained largely unchanged since then and remains useful today as we explore new ways to improve financial services through technology.
In 1992, a group of researchers at MIT released their report on how they were using computers to help manage portfolios for large banks. They called this practice “portfolio management” and said that it could be used as an alternative way for investors to manage risk more effectively than traditional methods like buying stocks or bonds (which are still used today).
Which markets are fintechs disrupting?
Fintechs are disrupting markets all over the world. In the US, fintechs are disrupting traditional banking, investing, and payments. In India, fintech is disrupting the way people pay for goods and services. And in China, fintech is disrupting everything from insurance to loans.
Banking: Fintechs are changing the way people bank. They offer services like mobile banking and payment processing that are faster and more convenient than traditional banks.
Insurance: Fintechs offer new ways for customers to buy insurance, such as peer-to-peer insurance where customers pay each other for healthcare costs instead of paying an insurance company.
Credit: Fintechs give customers more options for borrowing money, such as peer-to-peer lending or microlending through social media platforms.
In recent years, many fintechs have been focusing on improving access to credit in emerging markets. Emerging economies tend to have less developed banking infrastructures, which makes it harder for people without much capital or credit history to get loans. Fintechs are using technology—like blockchain technology—to solve this problem by streamlining loan applications and making them more accessible than ever before.
What are the benefits of fintech?
Fintech is a huge part of the future of finance. It’s not just about how you can pay for your groceries, either: fintech is making it possible to take advantage of all kinds of financial services that have traditionally been inaccessible or difficult to use.
We’re talking about banking on your phone, investing in stocks and bonds with a few swipes, and even buying a house with just a few clicks. Here are some of the benefits of fintech:
-Fintech allows us to bank from anywhere, anytime: You can check your balance on your phone or tablet, or even through a voice assistant.
-Fintech allows us to pay with our phones: You can send money to your friends and family in seconds with Mpesa, or you can buy goods at a supermarket easily with Mpesa or PesaPal.
-Fintech allows us to invest and save money more easily: You can invest in stocks and bonds through Robinhood or put money into savings accounts with Acorns.
Mobile payment apps are a form of Fintech
Mobile payment apps are just one type of Fintech product, but they can be used for many different purposes. For example, some companies use mobile payment apps to help their customers pay rent on time or get money back on purchases made with coupons. These are both examples of how mobile payment apps are being used to help people save money and make smarter decisions about their finances!
How Fintech is impacting businesses
Fintech is impacting businesses in a number of ways.
One of the most obvious ways Fintech is impacting businesses is in the way that they do their accounting. More and more companies are now outsourcing their accounting to third-party services like Popote Pay, and this has a number of advantages for both sides of the equation.
On the one hand, it allows small businesses to save money on overhead while getting better service than they would have been able to provide in-house. It also allows accountants to focus on their core business while still earning profits from clients who otherwise wouldn’t have been able to afford them.
Another way Fintech is impacting businesses is by making it easier for them to do things like accept payments online or manage inventory remotely without having to worry about meeting strict standards set by credit card companies or other financial institutions.
This has allowed many companies that never would have been able to get off the ground before due to restrictions placed upon them by traditional financial institutions but now find themselves thriving thanks primarily due to being able to accept payments using methods other than cash or checks.
Fintech is not only a key driver in the direct money transfer industry but it is impacting businesses in other fields a well. This technology has heavy impacted the field of Automation AI and Data Security.
1. Automation: Fintech has made it easier than ever before to automate tasks that used to take a lot of time, such as paying bills and making payments. This means businesses have more time to focus on other aspects of their operations.
2. Artificial intelligence: Artificial intelligence is being used to perform tasks like customer service, data analysis, and even writing reports. This can be particularly helpful for businesses with limited resources or large amounts of data to process.
3. Data security: The threat of cybercrime has been a concern for businesses for years now, but Fintech has helped them mitigate these risks by providing solutions that protect their data from hackers and malware attacks so they can focus on running their business instead of worrying about security breaches!
How Banks are trying to keep up with fintech companies
Banks are trying to keep up with fintech companies by making their services more convenient and accessible.
One of the ways they’re doing this is by offering more digital services, such as mobile apps, online banking, and other methods of communication. You can now easily send money and make withdrawals straight to your Mpesa wallate using bank apps at the comfort of your home as majority of banks have embraced mobile banking.
Another way is by using technology like artificial intelligence (AI) and machine learning. These tools help banks analyze huge amounts of data that would be too much for human employees to handle. This allows them to make better decisions about what products to offer customers, how much money should be loaned out at any given time, and so on. Most banks have now deployed chatbots powered by AI that can easily respond to your queries.
The rise of fintech companies has also led some banks to offer new products that weren’t available before (like cryptocurrency wallets). This can help them compete against other types of financial institutions—and it can also benefit customers who don’t have access to these new services otherwise.
The future of Fintech
The future of Fintech is bright, and it’s not just because of all the money that’s being invested in it.
Fintech is a field that has more than doubled in size over the past few years, and it seems like every day there’s another new product or service that promises to revolutionize the way we use money. And while those products can be very exciting to think about—and even use—what they really show us is how much we still don’t understand about financial services.
The truth is that we’re still trying to figure out what people want from their banks and credit unions, and how often they’re going to use them. We’re figuring out what kinds of services would be most helpful for small businesses, especially ones run by women or minorities (because those businesses need more support than others). We’re learning what kinds of products people want when they’re buying houses or cars or other big ticket items.
In short: there’s a lot we still don’t know about how people use money today—and even more we don’t know about how they’ll use it tomorrow. But as long as there are startups willing to take risks and try new things, there will always be innovation in Fintech.