The financial sector is undergoing a period of rapid technological advancement. There are several areas where banks once held a monopoly that is now being challenged by fintech companies. Financial technology is a precise definition of fintech. Any digital or physical tool that facilitates better banking, investing, or payment methods is included. Although the concept of financial technology has been around for quite some time, it took off in 2009 with the introduction of Bitcoin, the first decentralized digital currency that enables people to send money directly from one party to another without the need for a third-party intermediary like a bank.

What FintechIs

The term fintechis short for financial technology.It’s a catch-all phrase for a wide variety of online commodities, including cryptocurrencies and blockchain applications. According to John Mattera, a fintech firm is a business that either creates or offers financial technology.

Fintech Changed The Way We Bank

Banking practices have been altered by fintech. With the widespread availability of online and mobile banking, we can accomplish more than ever before. As a result of technological advancements, we are now able to pay bills, check account balances, transfer funds, and more from any location and at any time.

As fintech has grown, so has the availability of information about various financial products and services, from price comparison websites to virtual assistants that can help you keep track of your spending and suggest ways to save money.

The Impact Of Blockchain On Fintech

Blockchain is a novel data storage and sharing system that could revolutionize the way monetary transactions are handled. This technology is currently most widely utilized in Bitcoin and other cryptocurrencies. However, banks could use this technology to improve the safety and efficiency of their transactions.

Blockchain technology lets many parties access an immutable distributed ledger. One party must get a network consensus before making any ledger changes.  John Mattera claims this eliminates the need for banks to transfer money between individuals. Blockchain technology enables rapid, cheap, and decentralized peer-to-peer transactions without banks.

The Benefits Of Open Banking And Financial Data Sharing

This is particularly relevant for customers of banks that are not currently participating in open banking. If your bank does not share data with third parties, it is unlikely that you will benefit from this new service.

If you are uncomfortable with sharing your financial data, several steps can be taken to protect yourself:

  • Use a secure financial institution and avoid sharing information on social media or email.
  • Make sure your bank’s correspondence specifies how they’ll use your data. Before entering sensitive information like credit card numbers into an online transaction, contact them to find out how they will use it and if they will share it.

Things To Look Out For In The Future Of Fintech

The growth of open banking could be one of the most important innovations in financial technology. With open banking, users can access their banking information and conduct transactions via third-party apps or even chatbots. It’s very much like how you can use social media sites like Facebook and Twitter from any device, anywhere in the world.

Due to corporate investment, blockchain technology, which has been around since 2008, is now being widely adopted. Blockchain eliminates intermediaries, so users always have control over their funds. Your money is safe from theft and fraud since only you can access it. However, there will always be copies online, making it easier than ever to recover lost funds.