Financial Technology: Convenience of Financial Stability of Today

Abstract

The FinTech has gain more popularity throughout the years and have been putting itself out there to be as convenient as it can be. This paper will provide the reason why everyone should switch to the use of fintech. This paper also contains the benefits and issues of using fintech as well as how it can help some businesses to survive for a longer period of time or provide new companies to jumpstart their path to business.IntroductionFinancial Technology or FinTech in short, described by Investopedia as new technologies that finds a way to improve and computerized the use and execution of financial services. The main function of fintech is to help firms, business owners and consumers to have a better control of their financial conducts, procedures, and lives by using uniquely made software and algorithms that are used on computers and the most worldwide used piece of technology, mobile smart phones. Fintech also involves with the production and usage of cryptocurrencies such as bitcoin. In the recent years fintech has widen its involvement in financial section such as retail banking, money transfers or payment, managing investment and many more (Investopedia)

The purpose of this review is to see how far has fintech’s involvement in today’s world has been more of a convenience in terms of providing financial stability to business owners, individuals and the society as a whole rather than causing problems. This review will also contain the advantages and disadvantages of using fintech’s services. Information regarding how the fintech process will be secure will provide more insight.There is no doubt that using fintech can help revolutionize the banking and financial industry with either just a swipe or a simple tap. As said by Nakashima (2018) “fintech as new technology that can broaden the range of finance and bring about a revolutionary transformation in the way finance functions in the world”. This statement shows how fintech will bring about a better way of how organized and stable the finance can be. According to a study conducted by Ozili (2018) it is said that close to 50% of people in the developing world is already in possession of a mobile devices. Which brings to how easily accessible fintech is anywhere and by anyone in the world. Another convenience fintech can bring is also the payment services. Kang (2018) has already listed out in his study towards that online payment services are already being used and have gain popularity. Some of these services are Apple Pay, Samsung Pay, Android Pay and much more. These shows how the online payment system has already been made useful and easily understood that anyone can use it which is why it is already popular and well known. Another useful feature fintech has provided is lending. Loans can also be made easier and at a much quicker time, waiting in line in a bank just to get a loan and that is if they are able most of the time would frustrate people but not with the use of fintech.

Advantages of Fintech

According to the studies that have been conducted by Ozili (2018) and Nakashima (2018). The benefits outweigh the problems. Firstly, the obvious advantage of digital financing is that you don’t have to be physically there to do what is necessary. This digital financial inclusion would greatly reduce the amount of manual paperwork, fewer waiting lines in the back for the convenience of customers and also saves time and space, space being the location of the bank. With the help of digital finance, it provides a chance for an affordable, easily accessible and safe banking services to individuals that in the developing country. With the improvement of technology this will surely help individuals to convert from the old cash-based system into the new standardized digital finance system so businesses can run smoothly and safely. Another benefit of using digital-based transaction system is reducing the chances of fake paper money to be used.Not only would a better digital financial inclusion benefit for businesses but also for individuals. The services would provide underprivilege households to be able to actually save or start investments and be able to still afford daily routine to maintain stability in terms of finance. This finance stability would also provide to handle unforeseen events happening.Fintech providers also show how fast and efficient it can be as they do not handle situations like in the bank which would indicate that there would be less dull and tedious procedures to go through. With the reduce of boring protocols, fintech have time to improve more towards the financial technology to provide better services to customers.

Disadvantages of Fintech

The main problem of fintech is that it does not provide services for those who is not in possession of a digital device or smart phones. Adding that the device must always or at least have an internet connection to use the services. This would bring about issues face by older people or people who simply cannot afford a mobile device or internet connectivity.The problems using fintech is that it attracts “high-risk customers”. These high-risk customers are some of the reasons why some banks have a hard time providing loans to people because the banks classify these people to be of risk. This would lead to these types of people to be involve with fintech providers, which is said that if there are too many risky customers involve this can disrupt the stability of financial lending process making it harder for people to receive loans just like in the bank (Ozili 2018).

Another issue that would be raise is that digital data can be often breached. Which could lower the customers’ trust in using fintech as a source of an internet wallet or bank.SecurityAs for the security for the payment services, it is directly linked to the users therefore security is mandatory in mobile fintech payment services. (Kang 2018) This is to ensure that sensitive information will not be easily exposed to online hackers, therefore mobile payment services must be constructed securely in terms of both hardware and software. (Kang 2018)Mutual authentication between mobile fintech payment service providers and existing financial infrastructure must be establish before any payment is made. The unavailability of the mutual authentication would cause both side of the transaction such inconvenience as if a hacker assumes the identity of the service provider to the customer and just get the payment without providing the services requested by user. In order to combat this situation, the mutual authentication would be even more complex which would also bring another issue of the authentication to be too difficult and a waste of time to follow. (Kang 2018)

Conclusion

In conclusion, it is very convenient for the use of fintech anywhere in the world. Fintech is growing fast and it will no doubt be the cash of the future. Although there are still issues concerning the security it does still saves more time and space and more environmentally friendly as it does not use much space and the services is provided with the swipe of a finger.