From smart devices helping us make grocery lists to earning a college degree 100% online, advancing technology has changed nearly every facet of our lives. The worlds of banking and finance are absolutely no exception. To keep up with the digital needs of international corporations down to the individual, banks are required to develop strategies on how best to evolve. The development of fintech (financial technology) is critical to these strategies and is among the most forward-thinking tools in the field. Whether you want to start a financing career or if you want to further your current career, having a firm understanding of how businesses and banks are using fintech is critical. Here are five ways businesses are using fintech to drive innovation.
Paying by Smartphone
While the ability to pay for goods and services without cash has been around in the form of credit and debit cards for decades, the concept is starting to expand beyond these established forms of payment. Exchanging funds can now be done using a smartphone via apps like Paypal and Venmo. This has been a boon for small businesses as it makes their transactions more efficient and creates opportunities to serve more customers. Small businesses, however, are not the only ones able to take advantage of this form of fintech. Amazon and other companies are experimenting with cashier-less stores. This significantly cuts down on operation costs, and these savings are able to be passed on to the customer.
In the past, individuals had no choice but to go into a physical bank when attending to financial matters. Through fintech innovations, simple banking needs and even those that are more complex can be done with a smartphone. Cashing a check is as easy as taking a picture. While transferring funds to a different account is as easy as pressing a button. Mortgages can be applied for and even approved without ever meeting a banker in person. These incredible advancements are powered by fintech innovations from both startups and corporations.
Investing One Cent at a Time
It can be difficult to enter the stock market, especially if personal funds are low. Companies like Acorn utilize fintech to allow those with less discretionary funds to buy a small piece of a single stock instead of having to invest the full value of the stock. This can open opportunities to millions of people across the country who would not have previously been able to invest in the stock market. Due to this particular piece of fintech, the stock market has never been more accessible. This has the potential to make access to financial markets more equitable than ever.
Reaching the Unbanked
There are impoverished or remote communities around the world that do not have access to a commercial bank. The modern financial landscape is using fintech to reach these potential customers. Services like Cash App do not have extra fees, nor do they have a minimum required balance to start an account. The covid pandemic was a great motivator for fintech growth and that is not embodied more than in the move to service those who may be less fortunate. This new way of banking is changing lives in a tangible way.
One aspect of fintech that has yet to see full implementation but is already making great changes is artificial intelligence. Companies are using advanced forms of artificial intelligence to predict changes in stock value and automatically make trades based on these changes in price. These powerful pieces of software are able to make reliable financial decisions without a human checking to ensure it is done correctly. Companies also make this technology available to the general population so that they may also reap the benefits of this advancing example of fintech.
Earn a Fintech MicroCred with LSU Online
Those who want a career in finance today need to be adaptable to the ever-changing factors that fintech will bring. It is a powerful tool for financers to use, but only if they know its fundamental ideas. LSU Online’s Fintech MicroCred provides a strong foundation for learning about this fast-growing field. The course can begin as soon as registration is complete and is available to take at your own pace. Learn more about how Fintech is changing banking and finance with LSU Online.