Fintech’s future impact in financial and banking services globally.
Fintech is going to change the global landscape for the financial services of industries ; banking services in near future. It has a great potential to change the social economic lives of people.
Fintech will cut off the service charge ; it will improve the quality of financial services for the customers as they will totally give up using the old system ; organizations will offer more catered loans and will be working with customers segments underserved by traditional banks. Banks will have to work in line with this. So, the economic scopes will be broadening when, more and different kinds of people will be able to apply for and receive loans.
This ramification of the customer base means that, all banks will go with fintech.
It will be more efficient in gathering data, machine acknowledgement and tools analytics. This will be driving banks to do better at their underwriting scheme and guiding to more untied product offerings.
It’s more seemingly to expand their approach into higher output & more dodgy lending opportunities as fintechs aren’t bound to follow the often used restrictions.
The sharing economy will be embedded in every part of the financial system.
By 2020, consumers will need not to turn to bank for banking services, or, at least, not what we think of as a bank today. It may have started with cars, taxis, and hotel rooms, but financial services will follow the path soon enough. At this point, rather than automatically turning to a bank as an intermediary, the sharing economy refers to using information technology to find proficient matches between providers and users of capital.
Fintech will help to generate new ideas, ; change organizational culture, identify and attract new skills, and discover new areas for growth by being involved with external technologies.
Financial services incumbents will have better collaboration ; different industries will be tied up ; it will create new market opportunities ; new ways to generate values.
Furthermore, it’ll handle bunch of key technologies which are important apart from finance too & spotlight on how they are used in financial services, including cloud computing, the IoT and artificial intelligence.
Complications by Fintech
Fintech activities help to draw potential risks. These risks include counterparty credit, market and operational risks.
The first involves the default of one counter party in a peer-to-peer lending transaction facilitated by FinTech firms. The market risk relates to the probability of losing a portion of investment made by FinTech due to market movement.
Lastly, operational risk covers a wider array of risk events such as disruption to the information technology system, malware infection, and possible fraud by the firms’ employees. The list is possibly longer, including risk in settlement activities and data protection.
Countering fraud and verifying payments is one of the hottest spaces in fintech right now, not only because it is the lifeblood of finance, but because it is also resulting in new and novel ways of paying for goods.
Unfortunately, every time a new verification platform like fingerprint recognition is conceived, hackers are hard at work finding new ways around it. Researchers were recently able to prove how the fingerprint sensors on Samsung and Huawei scanners could be fooled using tools including an inkjet printer.
The anonymity and speed of fintech services raise the risk that terrorists and criminals will exploit fintech to support their illicit activity. As a result, fintech companies should expect and be prepared for government scrutiny of their compliance with AML laws