Gren Invest: FinTech instructions, Simplify Your Finances!
FinTech or Financial Technology is upending the way we engage with money, from attaining a mortgage to renting a car. It is the intersection of finance and technology a powerful combination that has led to innovation, efficiency, access and inclusion in financial services. FinTech isn’t only for tech startups, it’s being adopted by traditional banks, investment firms, and individuals, as a way to make operations more efficient, cut costs, and deliver more personalized user experiences. At Gren Invest, we are committed to making things crystal clear for you, so that you can understand the trends and decisions needed to take advantage of this refreshed financial world.
FinTech is such a big wide world. That includes mobile banking and digital wallets that allow you to transact on the fly and peer-to-peer (P2P) lending sites that give borrowers direct access to lenders while sidestepping banks and credit unions. This includes robo advisors, which provide online-based, automated, algorithm-driven portfolio management services available without human intervention for all levels of wealth. Moreover, breakthrough technologies such as blockchain are bringing an unheralded level of transparency and security to the various actors involved in financial transactions, while artificial intelligence (AI) is being leveraged to analyze massive data sets for everything from fraud detection to highly-individualized financial recommendations.
You can no longer not know FinTech If you are financially literate for modern times, that is. New technologies are likely to keep coming, upending what we know and allowing us to invent new ways to save, spend, borrow and invest. Whether you are a regular user looking for better banking products and services, an investor seeking for new opportunities in growing tech-enabled financial sector, a business owner aiming at better financial results, or a developer and bring into life a dream product understanding FinTech is no longer an “option” but a “need”.
We want to arm you with what you need to succeed in this new landscape here at Gren Invest. We decipher complicated issues, provide unparalleled insights on the hot topics, and submit well-informed advice on the best way to make smarter financial decisions. Dive into the items below to expand your knowledge of FinTech and prepare to take on the future of finance with arms wide open.
Latest FinTech Articles
Top Questions Answered
FinTech stands for Financial Technology, or, in other words, for any technological innovation to financial services. It spans everything from mobile banking and payment applications, to sophisticated investment algorithms and cryptocurrencies. Think of most FinTech companies as challenging the status quo of financial services, attempting to make things work more easily and cheaper. Companies in this sector use technologies such as artificial intelligence (AI), blockchain, and data analytics to provide innovative services to consumers and businesses, shaking up traditional players such as banks and credit card companies. This shift is transforming how we borrow money, seek credit and invest for the future.
The identity of Fintech is troubling the traditional banking industry, as taps at source new challengers and compels incumbents to adapt. Digital-only banks (or neobanks) provide cheaper, more accessible, mobile-first experiences, ultimately serving a migrating customer base, mostly comprised of younger generations. FinTech Lenders use non-traditional data to score loan applications, allowing for faster and in many cases more accommodating loan approvals. Payment apps had made peer-to-peer transfers and retail payments easier and had lessened dependence on cash and old-fashioned card networks. As a result, many traditional banks today are partnering with FinTech firms or building their own digital offerings in order to remain competitive and improve their product and service offerings for consumers.
Security is one of the most important aspects of FinTech and companies like TransferWise spend a lot of time and money safeguarding user data and moneies. They use cutting-edge security features, like MFA, E2E-encryption and intelligent fraud detection systems based on A.I. Moreover, the majority of FinTech startups in regulated sectors (banking, investing etc.) have to adhere to major government regulations just like normal financial institutions. But, as with any online service, there are some risks. And users should always practice good digital hygiene: using strong, unique passwords, being skeptical of phishing attempts and making sure they’re using legitimate, reputable apps and services.
Blockchain is a type of a distributed ledger technology (DLT): a decentralized system that records transactions in a secure and immutable manner. In Fintech, the most famous use-case is driving the digital currencies such as Bitcoin and Ethereum that allows for secure peer to peer transactions without the need for a central authority. But the use case for this goes well beyond that. Blockchain can be used to simplify cross-border payments, making them quicker and less expensive. It has the potential to promote transparency in supply chain finance and even more effective and safer systems in stock trading and settlement. Through the elimination of intermediaries and a single, shared version of Truth, Blockchain could transform the financial industry’s infrastructure.
The newish emerging financial technology is called DeFi, or Decentralized Finance, which runs on secure distributed ledgers (otherwise known as blockchains ) much like cryptocurrencies. The purpose of DeFi is to construct a new system of open-source and permissionless finance that doesn’t rely on central authorities such as banks or brokerages. Built with smart contracts on blockchains (mostly Ethereum),DeFi platforms allow investors to lend, borrow, trade, and earn interest on their assets in a decentralized way. Though it might promise greater accessibility and transparency, DeFi is in its infancy and incredibly volatile. It is the vanguard of the financial industry, but also poses severe risks that potential users must grasp.
I can say we use a lot of AI / machine learning across all aspects of what we do … it’s certainly become a fabric of FinTech. In lending, AI algorithms can make more precise judgments about credit risk by evaluating thousands of pieces of data beyond standard credit scores. Investment services leverage AI with robo-advisors to build and manage custom portfolios according to a user’s preferences and risk appetite. AI has an important identity in cybersecurity as well, as it looks for anomalous patterns in transaction data to flag fraud as it happens. Moreover, AI-based chatbots are enhancing customer service by offering users instantaneous assistance 24 hours a day and answering client’s question also.
What is a Robo-Advisor? A robo-advisor is an online, automated portfolio management service. Once a user completes an online questionnaire about his or her financial goals and time horizon and then assesses his or her risk tolerance, the robo-advisor suggests and manages a diversified portfolio, known as a lazy or couch potato portfolio, which usually includes low-cost exchange-traded funds ETFs). They provide benefits such as lower fees than traditional human advisers, low account minimums and easy access through web and mobile applications. That makes them a good choice for new investors or anyone looking for a relatively hands-off investment experience.
Digital-only banks, or neobanks, also known as challenger banks, have no bricks and mortar at all and exist solely online. This efficient, tech-savvy model enables them to slash overhead costs, a saving they often use to offer customers lower or no fees, higher interest rates on savings and other innovative features. They usually provide a complete range of banking services such as checking and savings accounts, payment services and lending all accessed over an easy-to-use mobile app. They've piqued the interest of digitally native consumers, with the greater attention to technology, customer experience, and transparency customers' fundamental requirements for great banking experiences making them a favorite of those who would rather not rely on traditional branch and mortar banks.
Payment apps, such as digital wallets and P2P payment services, make it easy to send or receive money from a smartphone as well as pay for goods and services. Users connect the app to their bank account, debit card or credit card. They just hit “pay,” choose someone from their contacts or type in a username and an amount. It is easier to pay with the app, paying electronically and often instantly. These apps add encryption and anti-fraud monitoring for security. They have become wildly popular because they allow for many everyday transactions from splitting a dinner bill with friends to paying a local merchant without cash or physical cards.
The future of FinTech is going to involve more and more integration of technology to every facet of our financial lives. We can anticipate more personalization, with people receiving very specific financial advice and product recommendations delivered by AI. Embedded Finance” will be the driver, and it explains a future where financial services such as loans and insurance are seamlessly integrated into non-financial apps and websites: Think of getting a loan at the point of sale on an e-commerce site. Blockchain and DeFi could mature such that global financial systems become more transparent and efficient. The reality is, the potential for innovation is far from exhausted in FinTech and finance will only become more connected, automated and user-centric.
Key Pillars of Financial Technology
To really understand the FinTech revolution, you must understand the foundational technologies that drive it. And these pillars are not about incremental change but represent profound changes to how financial services are organized, offered and protected. One of the biggest drivers of this is AI and ML. AI is the powertrain for a slew of advances in the already disruptive financial technology (FinTech) space, whether it’s robo advisors providing personalized financial guidance or fraud detection software that’s capable of scrutinizing millions of transactions within seconds to identify suspicious activity. Using data to predict the future and automate decisions, AI enables banks to cut risk, operate at higher efficiency, and provision services that meet the unique needs of their customers. It’s technology that lets a lending app approve a loan in minutes or an investment app rebalance a portfolio automatically.
The third intervention in that list is Blockchain Technology. First introduced as the underpinning of Bitcoin, blockchain is a public ledger of transactions: a record of all transactions in a network, available to all participants. Its capacity for recording transactions in a transparent and tamper-resistant way has implications far beyond digital currencies. It is being investigated in the realm of FinTech for making complex international payments, which might currently involve multiple intermediaries, easier as well as building more efficient and transparent systems for stock trading and settling. Because by decentralizing the validation of transactions through network, blockchain creates trust in its process, then cuts the risk of fraud and builds a safer and fairer financial world.
Trust is arguably the most important pillar of all, as the entire FinTech space is built in trust. Cybersecurity is most likely one of the most important pillars. With more and more transactions happening online, it’s more important than ever to prevent theft and fraud of sensitive data and assets. FinTechs use a layered security model that includes end-to-end encryption, two factor authentication (2FA), as well as biometric verification. Plus, they are increasingly depending on AI-based systems to look for threats in real-time and proactively find weaknesses. For us, this means genuine FinTech services are generally just as safe if not more secure than regular banking although a vigilant and educated user base is still the first line of defense.
Finally, the advent of Digital Banking and Mobile-First Platforms has redefined user demands. Consumers today want everything easy and fast, and a frictionless digital journey, and FinTechs have provided that. Thanks to easy-to-use mobile apps, we’re able to open a bank account, apply for a loan, invest in the stock market and send money to a friend, all on our smartphone. Customer should automatically come first now, a degree of customer obsession that this user experience has put the entire industry into. These four pillars AI, blockchain, cybersecurity, and digital platforms are the foundations of today’s financial stacks, and are being combined in new ways to connect and power much more accessible, efficient, and creative financial world.