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How Technology is Transforming the Finance Sector ?

Sheeban
Sheeban
Aug 18 • 3 min read

In this fast-moving economy where change is happening at lightning speeds, the environment is conducive for the growth of Fintech startups in India. The finance sector is losing top performers to other job opportunities at an alarming rate, as is believed by a majority (89%) of financial services executives. Being the least trusted sector, finance is slowly hitting a plateau when it comes to growth. Fintech, on the other hand, is revolutionizing the financial policies with state-of-the-art technology. The last half-decade has seen a significant surge in the Fintech sector is to a point where it is said to grow by an annual margin of a whopping 45 per cent. Here are four ways Fintech is changing the face of finance globally.


Lending

Lending is the mammoth of the financial industry and most banks and is creating new business models that generate more profit. This has brought about the onset of Peer-to-Peer (P2P) lending which aims to eliminate the middleman entirely from the transaction. Blockchain, the technology behind Bitcoin and other cryptocurrencies, is one such example of P2P which strives to revolutionize the way financial transactions are carried out on the internet. Companies and also individuals have jumped the bandwagon in making investments in Cryptocurrency and most have made significant earnings as a result.

Fund Transfer

Facilitating fund transfer between parties is huge. Banks have been known to make at least four billion dollars annually, just from the fees obtained during transactions. Fintech is working towards bridging this gap and providing better solutions and alternatives when it comes to funding transfer, thus minimizing the loss faced by people making transfers. Companies like Paypal, Transferwise, Stripe, M-Pesa, etc. are providing alternatives for people that have changed the way payments are made.

Online Shopping

Online shopping is gaining traction as more and more retailers suffer. As the online shopping business is growing, companies are seeking new ways to rope in more and more customers by increasing transparency so that customers feel safe while buying things online. Service such a Flint, Paypal, WEPay, etc. are making it easier for people to make payments online fearlessly. Fintech acts as a platform for trustworthy transactions where transparency is a key feature.

Investing and Stock market

Contrary to popular belief, Fintech is more than just cryptocurrency or Blockchain. It holds much more investment potential than the average investor gives it credit for. There are many diverse Fintech stocks in the existing market with a lot of potential for making profits regardless of the market situation. A few such examples are

Fiserv(FISV): This has been so successful that its stock hasn’t had one negative annual return since 2008

Paypal: The smartphone generation; the millennials are a huge factor for the perpetual success of this payment gateway.

Alibaba (BABA): Jack Ma’s Alibaba Group Holding Ltd is a very lucrative stock to buy for guaranteed profits.

Fintech as a whole facilitates transparency, accountability and financial inclusion thus allowing for more and more financial transactions based on mutual trust. Fintech is being embraced by more and more companies as it is the future of finance.