Now we can all come across the phrase fintech in the vastness of the network. All this is because this sector is actively developing and bringing its users a huge number of advantages and technological solutions that help to simplify the implementation of financial tasks. Keep reading this article to learn as much as you can about it.
Definition of fintech
Fintech is an abbreviation borrowed from the English language and obtained by combining the words “Finance” and “Technology”. It refers to new solutions that demonstrate revolutionary and innovative changes in the development of applications, processes, products, or business models in the financial services industry.
The term is used to refer to a new line of business that provides innovative financial solutions based on software, encompassing under its definition both the services offered and the companies that offer or develop them and that meet the requirements of current customers.
Basically, Fintech is changing, with innovative computer solutions, and classical business processes, mainly from the financial industry and the insurance sector, such as payments, investments, financing (crowdfunding), or security, among others.
In recent years, the term “fintech” has been used very often in companies of all kinds due to its boom in different sectors and businesses. In fact, it is precisely because of this upward trend and its benefits that the number of startups dedicated to creating this type of technology has increased so much, and already consolidated companies that are implementing these solutions to improve their products or services.
The functioning of fintech is based on providing people with banking, administrative, accounting, and economic processes more conveniently and practically with the help of accessible digital tools such as mobile applications, web platforms, and specialized software, among others.
It is because of the convenience that such technologies offer that more and more entrepreneurs are starting to invest in the implementation of their projects. Fintech can be either in the form of software or any other development or implementation of ready-made systems in your business. However, its main purpose is to simplify the execution of financial transactions.
To order the creation of a fintech project, you need to find a good company. It is not so easy to do this, because there are a huge number of candidates on the market who are not always highly qualified specialists. Therefore, if you want to contact a reliable company, then we recommend that you take a look at the top 10 list of reliable fintech service providers.
The main advantage of fintech
Companies can meet their financial and transaction management needs while meeting consumer demand for flexibility and transparency, and benefit from the full benefits of new technologies in financial processes.
However, the participation of fintech is not limited to the financial industry. The second goal of fintech is to improve and offer new opportunities for small, medium, and large companies across industries to apply and manage their own finances.
The main purpose of financial technology is to add value to existing financial services. In addition, they generate practical solutions through technological innovation in the administrative, accounting, and financial tasks of companies, improving and optimizing traditional financial processes.
Thus, in general terms, fintech serve to:
- Optimization of payment processes, transactions, and online banking;
- Development of infrastructure for financial services through, among other things, data science, big data, business intelligence, and blockchain;
- Increasing cyber security and developing security systems in databases;
- Management of digital assets, cryptocurrencies, and improvement of alternative monetary policy;
- Automated management of online financial processes;
- Implementation of crowdfunding activities (collective financing).
Fintech solutions may appear following the needs of the market. Among these, the most common were: increasing additional payment channels, increasing non-financial value-added services, and campaign financing.
Fintech and digital transformation
Digital transformation is the process by which new technologies are applied to different areas of a company, such as products and processes, in order to increase efficiency and generate new revenue opportunities. The goals set in the digital transformation strategy depend on each company and its current situation regarding the automation of administrative and financial processes, which can be an adaptation to online procedures or digital invoicing.
Fintech plays a fundamental role in the digital transformation process, as it allows you to digitize and improve the processes associated with the administration and finance of the company.