FinTech Wave – As we all know that FinTech entering in its 3rd wave or many have entered already. This post focus on FinTech not just FinTech 3.5. MFS, Banking, Telecom and IT Industry players are justing talking and dreaming FinTech even with open eyes. These entities are helping in for making decisions for investments and long terms planning through big data analytics. Shifting or transforming current 100 years old ecosystem into the new and dynamic system a pretty big thing.
FinTech & Rest of the Industry
Payments innovation is happening and it is continued since the end of 2014. Interestingly it’s driven by that outside of traditional payment industry. IoT and Technology industry people keep an eye here, comment and share your views, agreements or disagreements.
Big Data analytics through data science has helped in protecting cardholders data and authorizing correct transactions only. In FinTech it’s now more about authenticating digital identities and pattern recognition rather than simply yes or no. The question we have at hand are
- Will merchants going to adopt these new AI-based changes?
- When consumer will demand more security for their data?
Innovative FinTech payments product gets delivered when the surface or boundary of availability, affordability and accessibility is insufficient to divert. This wave passes the surface or boundary but the nearest sectors of the payment wave tend to be attracted to and are retarded by the surface or boundary (i.e regulation and compliance). India is coming out as a strong and innovative hub for FinTech and hopes this would continue. This should stay for long as India in business and tech business is quite strong.
I wish you all a very happy new Year 2016. Writing this post from Jakarta Indonesia at 01:29AM 2nd Jan 2016. Payments look really easy. Which is why innovation is so hard. While the cash payments wave continues unaffected. Mobile/Internet Payments on e/m Commerce Platform is bringing new innovations to the payment industry and changing the way merchants do business.
How FinTech Changing the Game Rules
The change in this segment is so huge which cannot be absorbed alone by one type of business entity. Payments gateway and solution service companies experimenting with customised solutions rather than giving one-size-fits-all(Like a master one master key for all holes) product solutions to merchants.
Year 2015 was the year of start/introduction which brought transformation/ revolution or a big/huge tsunami culture wave in cross border remittance, lending, crowdfunding, Insurance, banking (Not Banks), cryptocurrencies, micropayments through mobile devices and also it gave solid kick to take off the credit rating systems to offer microlending on the fly.
Micro Insurance for funeral expenses, Accidental insurance for medical expenses and education insurance for kids whose guardians pass on during their(kids) time of school. Wallet and payments service providers went a step ahead and built products to enable one-touch solutions instead of a user having to go through multiple steps to complete a transaction.
FinTech surrounded by Payments(Mobile[USSD, Mobile App & SMS], Plastic[POS & Internet]), Lending, BigData, security, Investment portfolio and wealth management, money transfers, Cities with jobs, innovation hubs, security & people. If we look at FinTech and its strings; very easily tree-like picture can come out. The credit rating system will show the path to deliver the most required need.
FinTech – A Serious Business Case
The question coming out of all this innovation in front of the ministry of innovation – Is FinTech a wave to pass on or an Opening to some giant and stable water flow kind of system which would take a bit longer before it gets dry out and grow to its optimum level. FinTech is on rising and day on day basis its bring banking services so close to every consumer and business which was never felt or made available before.
The banking services served by FinTech leaders are very innovative, different and easy to use and make use of for benefitting the business. Fintech as the leader of today in global financial services knows that modern payment solutions need to be able to evolve and adapt, nimbly and securely, with the ever-changing trends in consumer behaviour. By the way, Fintech built infrastructure to enable more merchants to accept payments.
FinTech with help of IoT is putting too much value added services on the table that engage consumers in a more meaningful fashion. Merchants can interact with consumers like never before, offering location-based services/offers, individualize loyalty rewards and discounts, the ability to pay with points (Sort of virtual currencies), personalize suggestions using beacons and identity services, On the fly loans/credit and cash advance too. The movement of money is developing quickly; starting from its core platform to point of sales/point of payment acceptance.
Methods to transfer/ remittance money are adopting new technologies on every day’s basis and so the new threats. Fintech is making use of IoT to transforms lives and business by adopting all these new technologies/threats to keep the growth pace on and handshake with the biggest constant factor “Change”. Digital Payments, Machine Learning, Online Payments, Digital currencies Payments through mobile payments (USSD, Mobile Apps, NFC & SMS), and Big Data are the main pillar of FinTech roof.
Financial Services With Intelligence
Technology has changed and new FinTech startups accessing fundings and investment in a very easily and swiftly. Market place leader, investors, online exchange platforms helping all parties to come together to meet and exchange their ideas and business models like never before. Risk assessment or mitigation is also coming on the fly. FinTech startups also ensuring that compliance, policy makers & regulators to have access to the information which is urgent, important and authentic.
Fintech & IoT combo offerings through payment trending/spending habits of consumers. And merchants can accomplish this seamlessly without the need for POS or terminal recertification.
Financial technology services firms are deploying a very easy, simple and real uncomplicated mix of technologies, computer systems, applications, and processes to serve customers and business partners and to solve organizational challenges. And legacy systems become increasingly inefficient as they age (Core Banking Platforms, Credit rating systems & BI Platforms etc) — in part because they are often not interoperable with newer technologies. Like someone said, “relying on sports will be a poison pill for cable and satellite services”. Same goes for banks, MNO, financial services institutions etc.
A financial services firm that depends on legacy or single content/service systems will frequently encounter serious problems when attempting to add newer software and services, Modern open-ended API, User defined architectures & Software applications(Saas).
FinTech a Solution to Banking Problem
Fintech is putting efforts to solve problems by addressing it with point-to-point integrations among existing systems and with little add on flavours so that it would remain viable, relevant and cost-effective. In time, however, these custom point-to-point integrations create multiple, fragile, and complicated dependencies (This is for sure for any technology). Systems coming out of these solutions are prone to failure and responsible for instability.
And even when they work, the complexity negatively impacts the business resources. Bitcoin, pre-funding and gold coin systems are on rising to speed up the payment, influence government policies and swift closure to contracts among stakeholders. FinTech with help of IoT, security systems, strictly AML policies need to ensure and facilitates a better understanding and working system on how digital currencies operates in technical and economic level to hit the correct equilibrium. So now with help of Fintech industry is gaining access to easy, open and fewer costly systems.
FinTech or financial technology adding technology in the whole of banking, securities, investments and finance industry. Technology is transforming local transactions to national ones. Lending, money remittance, and a host of other financial activities are being profoundly changed by the ease with which technology allows people to interact over distance.
Fintech to take the lead to ensure an economy where innovation and prosperity can cross state lines. Because of FinTech data has been more available, accessible and usable to give a new shape in form of credit rating to offer on the fly loan/credit.
Many of them are on the list, too – Plastic Money companies aren’t suffering at the expense of these innovators. Payments are becoming invisible. Our money is going from physical paper to bits and bytes of electronic data. In fact, it’s quite the contrary. The tracks they’ve laid over the years and the innovations they’ve made to the platforms is what’s give payments life to these new innovators.
Points to Note:
All credits if any remains on the original contributor only. We have covered all basics around FinTech, its working models and the importance of quality financial services to the masses. In the next upcoming post will talk about implementation, usage and practice experience for markets.
Books + Other readings Referred
- Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
- Lab and hands-on experience of @AILabPage (Self-taught learners group) members.
Feedback & Further Question
Do you have any questions about Telecom, FinTech or their new enablers i.e AI, Machine Learning, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. Will try best to answer it.
Conclusion -: Banks are on high alerts and many have started coming out of their old sleep but with pace which is very very slow or almost negligible. Faster/quick/swift payments is a solution. But what’s the problem? Investor protection against back drops and fraudster are rapidly on raise with help of advance technologies. The first is that the rise of these non-traditional payments innovators doesn’t necessarily mean the demise of some of the biggest names in payments.
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