Financial services are no longer restricted to physical institutions. Since there is a tech revolution, Fintech is no more a banking industry buzzword. Instead, it has become a popular concept in the field of financial technology.
Global transactions in FinTech projects have more than doubled to $112 billion, up from $51 billion last year that is what Fintech research says. It’s more than proof that the financial services industry is on the verge of a digital transformation.
This revolution is affecting all banks and financial institutions around the world. If you do not know what FinTech exactly is, continue reading.
FinTech in Brief
FinTech is a concept created by combining two terms: banking and finance and digitalization. In brief, FinTech applications in banking develop revolutionary items/solutions using digital technologies, like mobile banking, digital financial services, big data, and broader money management.
FinTech was described as an innovation used by banks and financial institutions in their back-end networks. However, its meaning has shifted dramatically. And we will look into it now.
1. Technology-Based on Smart Chips
Smart chip ATM cards have made a major contribution to reducing financial losses caused by missteps. It includes EMV tech, which is built into the chip. For each transfer, this technique enables a one-time code. This improves protection when the code is only valid for one transaction; thus, it will be useless even if it is stolen.
Bankers are always searching for new ways to protect their customers from fraudsters by offering top-notch protection. Magnetic stripe technology, in contrast to smart chips, uses the same key for all interactions, rendering it more vulnerable to hacking.
2. Biometric Sensors
Biometric sensors are one of the many technologies that FinTech has brought to the financial sector. ATMs are seeing two technical advancements: biometric sensors and iris scanners. Furthermore, these developments are ground-breaking because they will remove the need to hold your card. In addition, you won’t have to recall your badge.
Other than offering convenience and comfort, these advances will make ATMs more secure than ever before, as you can access your account without having to enter a pin. To recognize the account owner, biometric ATMs use integrated mobile applications, fingerprint sensors, palm, and eye recognition.
3. Branchless and Omnichannel Banking
Digital financial companies are changing the entire financial sector from a branch-specific operation to multiple digital platforms like the internet, social media, and smartphone.
It also decreases the bank’s reliance on its physical locations to operate. As a consequence, several banks are trying to reduce their branch count by implementing omnichannel banks.
4. Chatbots for Customer Support
FinTech companies have also developed interesting customer service chatbots, which have become increasingly popular over the years.
Chatbots are simply software programs that use machine learning and human language processing to learn and practice personal communication continuously.
Chatbots are extremely effective because they automate customer interactions, such as handling questions and guiding customers to the relevant department.
5. Electronic Wallets
Another sign of the emergence of FinTech services is the massive growth of E-wallets. More and more users are drawn to it. Mobile payments, PayPal, Android, and Samsung Pay, and Apple Pay are just a few of the world’s most common e-wallet services. P2P transfers, top-up & energy bills, global remittances, online ordering, and many other uses are all possible with these accounts.
Also Read: How Your Fintech Can Benefit From APIs?