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Fintech is a new technology in the financial services industry. To understand what Fintech is, readers can refer to the following article by Mytour.
1. What is Fintech?
From a technical standpoint, Fintech is simply the fusion of financial services and technology. However, Fintech companies are innovating new solutions rather than just applying technology to the financial sector, leveraging big data, analytics, and mobile to disrupt existing core services and alter user perceptions of personal finance.
2. How are Fintechs engaging with traditional financial institutions?
Startups need not necessarily offer new services, but provide services through new solutions, by offering customers solutions to easily discover financial products or services and providing them with connectivity solutions through familiar devices and technologies.
3. Financial sectors impacted by Fintech
Fundamentally, all financial sectors are influenced by Fintech, including lending, insurance, investment, banking, and money transfers.
However, today we have robo-advisors automating investment processes, peer-to-peer lending platforms making borrowing easier, including through online forms, even sending money to friends via online chats, ...
4. Benefits of Fintech
- Speed and Convenience: Fintech products tend to be transacted online, so users can access them easily and quickly.
- Enhanced Product Selection: Users benefit from a wider array of products and services, as they can purchase these items remotely, regardless of location.
- Better Discounts: Fintech companies do not necessarily need to invest in physical infrastructure like branch networks to provide cheaper transactions for users.
- Personalized Product Offerings: Advancements in technology enable Fintech companies to gather and store more customer information to offer personalized products or services.
5. Hidden Risks of Fintech
Opaque Rights
- Lack of Transparency in User Rights: Fintech companies are still relatively 'fresh' in the financial industry and utilize various business models compared to traditional providers. This may lead to unclear delineation of user rights.
- Abrupt Decision Making: Financial products purchased online are instantaneous, allowing users to make sudden decisions without specific information.
- Technology-dependent Risks: Online financial products may expose users to various technology-dependent risks. For instance, users' personal data could be illicitly utilized, or they could fall victim to cybercrime.
- Exclusion of Certain Users: While technology can enhance choices and access for most users, it may exclude latent users who are unfamiliar with using the Internet or devices such as computers, smartphones, and tablets.
6. Is Fintech the Future Trend?
Although the initial predictions of disruption in the Canadian financial services sector have not materialized, new trends have emerged.
The financial and banking industries in Canada are fostering relationships with Fintech startups to better serve their customers. While Fintech companies are adaptable and willing to work with new technologies, current financial companies have the capital and customer base to rapidly develop these new products and services.
7. Fintech Development Opportunities
Fintech relies on digital customer interfaces lacking personal connections with financial service experts. Users will have opportunities to apply new technologies to improve efficiency, connect with previously underserved customers, or new businesses.
The first issue we need to address is awareness of this new technology. Becoming a resource for customers, providing them with information on the benefits and potential risks of these services. By understanding the changes and learning how to maximize this new technology, we can better serve customers.
The article above introduces you to what Fintech is. What are the benefits and risks of this new technology? In addition, if you have any questions or concerns that need clarification, readers can leave their comments in the comment section below the article.
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