November 29, 2021

The importance and benefits of Fintech Apps

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Technology is transforming every walk of life, and the Financial sector is also bearing the fruits of technological advent in the form of Fintech. It is helping the financial sector to get accustomed to the dynamically changing landscape that technology innovations have brought. We can witness how the established financial organizations are forced to incorporate newer ways to change their business, service delivery, and customer engagement model to not get left behind. 

Fintech has incorporated modern technology advancements with Financial services to provide better financial services to businesses and individuals alike. In this article, we will give you a fair insight into Fintech, its importance, and its benefits.

What Is Fintech?

Fintech, or Financial Technology, is any technology that offers financial services via software, such as mobile payment app, online banking, or cryptocurrency to the customers. The primary objective of Fintech is to compete with the traditional financial services while transforming the way businesses and consumers access their finances.

Financial technology comprises a wide range of applications that consists of tools to change the way consumers access, track, facilitate and manage their finances. Fintech aims to reach more than 2 billion people globally, who don’t have bank accounts, but still can access financial services without involving any traditional financial institution. 

Types of Fintech Applications

We have the following type of Fintech applications available in the market :

  • Mobile Payments – Mobile payment gateways and apps are some of the most rampant use cases of Fintech. These apps enable users to perform all banking functions without physically visiting a bank. Users can send or receive money via their smartphones at a nominal transaction fee.
  • Insurance Tech Apps – These apps are developed to provide tailored insurance services to the consumers while keeping the data secure. Insurance tech applications enable finance organizations to streamline their insurance process, online claims submission, and policy management.
  • Crowdfunding Platforms – Crowdfunding is among the biggest examples of Fintech platforms these days. These platforms allow startup owners and entrepreneurs to raise funds from all over the world. This platform helps them to bypass the geographical boundaries to approach international investors.
  • Robo-Advisors – It is an online investment management platform that implements tailored algorithms to generate portfolios and allocate assets for customers. It engages the users in several investment activities with negligible manual efforts at an affordable cost. 
  • RegTech – RegTech stands for Regulatory Technology app, which focuses on automating the compliance processes for financial organizations. These apps offer cost-effective and rapid management of massive amounts of data, including taxation information, compliance documents, and transaction records of consumers.

Why Fintech Apps are important?

Fintech apps  are quite new in the Financial ecosystem, but they have proved their worth in such a short period. Here are few points that show why Fintech is important for us : 

Financial Inclusion – Fintech helps in the inclusion of people who may never have availed of financial services before. Fintech helps people to access basic financial services such as digital payment systems, e-wallets, and mobile money, etc. Fintech companies are spreading like wildfire in developing countries and helping them to lift people out of poverty to create a better financially inclusive environment.

Cost-Effective Option – Fintech organizations offer cost-effective financial solutions if we compare them with traditional financial institutions. Fintech leveraged technology to automate tasks and cut down the cost by not establishing physical branches to serve their consumers. Fintech keeps overhead costs in check, which allows them to pass on the cost benefits to the customers. Customers can avail themselves of the banking services with negligible fees or commission.

Safe and Secure transactions– Fintech organizations score high on security implementation if we compare them with the traditional baking institutions, due to their fast-paced nature in adopting modern technology and security measures. Fintech companies ensure that all transactions executed on their platform are protected, which includes customer data and other financial information. Fintech organizations are using revolutionary features and security measures such as location-based security, strong authentication, data encryption, to keep their customer’s data secure. 

Empowerment of Small Businesses – Large businesses always had the upper hand as they were able to utilize modern tools and technologies to improve their service delivery. Now even a startup or a solopreneur can avail modern technologies and tools to empower their business. Innovative fintech solutions help small businesses not only improve their services but also expand their capabilities while operating at a higher scale and efficiency.

Improved Financial Capability – Fintech helps to simplify the process of financial management; it doesn’t matter if it’s a personal investment or corporate finance. Several organizations are building tools to promote financial education and literacy. It has been observed that with an improvement in people’s financial education,  the people will be capable enough to reduce their debt, they can understand the value of financial planning and budgeting and prepare them for future investment.

Benefits of Fintech Apps

  • Unprecedented Personalization – Organizations develop fintech apps and integrate data analytics solutions to understand consumer information and address their needs. This data helps organizations to deliver personalized products and experiences to their consumers. 
  • Unparalleled Convenience – Fintech apps offer higher efficiency coupled with unparalleled convenience of making online transactions. Consumers are now preferring to utilize smartphones and tablets to manage their financial transactions. Fintech apps enable customers to execute financial transactions from their phones at their convenience.
  • Enhanced Security – Fintech apps pay utmost attention to Information and Cyber Security. Financial organizations are using innovative and secured mobile technologies to develop their products. They incorporate robust security technology and protocols to ensure consumer data is kept secure. Data encryption, Biometric authentication, and 2-Factor authentication are the most common security measures implemented in Fintech apps.
  • Cost Reduction – Fintech companies can provide cost-effective solutions to their customers, as they don’t have any brick-and-mortar costs obligations such as lease, advertising, and other resources. Instead, they can invest in application development and offer services at a nominal cost. 
  • Rapid Approval – Fintech apps ensure seamless accessibility of financial solutions to their customers by improving the rate of approval. Fintech organizations are leveraging the ability of automation to speed up their approval and compliance process so that consumers can avail their services in no time.

Conclusion

Fintech is gaining massive popularity due to its enormous benefits, and it is been driven by modern software and mobile technology. Fintech is not only catching up with conventional banking, but in some areas, it is giving a run for the money to the traditional financial solutions. Fintech has adopted the latest innovations to drive user engagement, enhanced security, and improved personalization.  Fintech helps financial institutions to win over the customers via their transformative and affordable solutions. Fintech is among the most exciting technology domains that attracts a wide range of innovative and cutting-edge solutions while reinventing conventional banking services.

Author Bio

Saurabh Sharma is a Digital Marketing Executive at Arka Softwares, a leading mobile app & web development company. He has 2 years of experience in the Information Technology industry. He spends his time reading about new trends in Digital Marketing and the latest app development technologies.

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