Digital technology is giving financial services a new push by eliminating many hurdles of financial services. The key technologies serving as the fundamental drivers of fintech are connectivity and high computing power.
The combination of the internet and mobile technology together has increased the convenience for consumers to access financial services. In addition, better connectivity has reduced the cost associated with remote interactions and information transfer.
Furthermore, low-cost computing power in the form of smartphones is helping consumers to perform complex transactions. Automation, artificial intelligence and process improvements that manage the risks associated with fintech services further catalyze this escalation.
The Role Of Connectivity And Computing Power In The Fintech Industry
Financial organizations, including fintech, are now relying heavily on connectivity to improve different financial services like making transfers, investing in Lottery Sambad and more, lending and receiving payments. The improved accessibility to the internet and low cost to access the internet has assured ubiquitous connectivity amongst the stakeholders of the fintech ecosystem. It has successfully eliminated the hurdles to the expenses of services along with financial access.
The connectivity has ensured that with a simple smartphone, primary access to financial services is available to everyone. In addition, low-cost computing plays a direct role in ensuring the smooth functioning of ubiquitous connection points. Furthermore, it is generating a large volume of data; present now as big data, which is essential to ensure efficient data storage, processing and analysis.
The Power Of Combination Of Connectivity And Computing Power
Combining easy connectivity with scalable computing contributes to the development of data storage infrastructure and cloud-based computing. The result yields improved efficiency and a reduced fixed-cost barrier to the entry of different financial services. The combination of the two has also pushed many fintech companies to adopt cloud-based services.
The World Bank Global Findex data indicate that combining the two has also increased the ownership of financial accounts from 51% of the population in 2011 to 76% in 2021. Subsequently, it has improved the lives of people with low incomes. For example, people residing in remote locations through online payment can now buy tickets for Dhankesari easily. Therefore, it is safe to assume that technology has helped users to overcome geographical access barriers while ensuring transparency and security of the transactions.
The New Financial Infrastructure
The digital transformation in the fintech industry demands new infrastructures, including but not limited to data exchange platforms, fast payment systems and digital ID. Only through new financial infrastructures can it be possible to support market outcomes. The new economic infrastructure’s importance is already realized in developing and developed countries. The same is visible in the form of increasing the mobile money systems to change the payment landscapes. Also, the new financial infrastructure contributes to the growth of both broader markets and market segments.
The Future Of The Fintech Industry
Digital transformation is revolutionizing the financial services industry for all the right reasons. Primarily, strengthening economic development ensures financial inclusion and poverty alleviation. However, to reap the maximum benefits of this digital transformation, the different authorities must develop suitable supervisory and regulatory approaches. Consequently, the core policy should ensure integrity, stability and consumer protection.
The pandemic has worked as a catalyst for the growth of the fintech companies to serve both the individual and businesses. Now the condition is such that the services of the fintech industry are no longer a want but a basic need, which is why the number of players in the fintech industry is increasing with each passing day. Furthermore, the investors also realize the fintech industry’s role in development; therefore, the fintech investment across the globe has increased by many folds.
In the coming years, the fintech industry will receive further boost through technological advancement, policy support and change in consumer behavior. The impact of the same would be visible through new asset classes, a further increase in cashless transactions, a breakthrough innovation in the financial ecosystem, a rise of digital currencies and new payment models.
Even though the fintech industry is bringing changes which can be best described as work in progress, it is already fetching the must-required changes in the financial infrastructures, business models and financial products to revolutionize the market structure and incumbents. However, one must note that the benefit of the fintech industry can only manifest when the regulatory approach supports it.
Technology News