The term financial technology is often used to describe cutting-edge new concepts like blockchain and algorithmic trading. It also refers to an entire industry in which new technology use cases are developed and deployed to streamline more traditional-looking finance functions.
For example, companies such as Square allow small businesses or individual sellers to accept credit cards on their mobile devices – an innovation that has reduced transaction costs by eliminating the need for merchant accounts. Other examples include automated customer service tools such as chatbots and AI interfaces that reduce staffing needs and keep call center costs down, and systems that detect fraud by analyzing data related to payment history.
Moreover, fintech innovations in the payments space are improving accessibility by unbundling conventional banking services. For instance, online money transfer services such as Ripple provide a faster and cheaper alternative to traditional wire transfers. Or, in the case of mortgages and loans, “insurtech” providers can make it easier to obtain financing by leveraging the power of data to process applications more quickly.
Similarly, open banking is changing how businesses collect money, from e-commerce platforms such as Shopify for retail and Mindbody for yoga studios to integrated payment providers for brick and mortar shops, plumbers, and other service industries. Many of these innovations rely on the proliferation of smart, connected devices that are increasingly becoming part of people’s everyday lives. And the good news is that this trend looks set to continue. McKinsey estimates that global fintech ventures will grow at more than three times the rate of conventional banks between 2022 and 2028. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/