The future of money - What is FinTech?

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FinTech - short for financial technologies - is more than just a buzzword of the 21st century. Something that was hard to imagine just a few decades ago is now becoming an integral part of our lives, and it is bringing different exciting changes for the future.  Initially, this technology was limited to the back offices of banks and trading companies, where it was used solely for accounting and bookkeeping. However, in today's world, this viewpoint is obsolete and this technology is resuming a new role. Fin-Tech now encompasses a wide range of technical interventions ranging from personal to industrial finance. It is constantly improving the financial services industry, and consequently, the customer experience. Additionally, it is also one of the fastest-growing sectors of global business, with new inventions and opportunities constantly coming up to the scene.

If you are still not sure what FinTech is and is it the right choice for you, we have to tell you that you are already using it. Every time you perform any financial activity enabled by technology, such as instant money transfers, QR code-based payments from smartphones, bypassing a bank to apply for loans, raising funds for a business start-up, and managing your savings without the need for human intervention - you are a FinTech user. Even when you just contact customer support and use chatbots to find some information - you are in the world of FinTech.

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Loans and services

Getting access to funds has become much more open and decentralized, with alternatives such as crowdfunding and peer-to-peer lending joining the conventional ways of borrowing money from a bank through loans and mortgages. These modern, non-traditional ways of exchanging capital have helped investors to thrive while also allowing access to funds to those who do not qualify for traditional loans. FinTech is “democratizing” banking and financial services, making them more transparent and available.

It is no surprise that today, consumers can apply for a wide range of consumer credit products, completely online. For example, Saldo has its own advanced loan system that ensures responsible lending and promotes international business development. The best thing about such companies is that they are completely digital, so you do not have to gather tons of papers and physically take them from one place to another to get the product or service you need. Another benefit is speed. The decisions are made automatically, and usually within minutes, you will receive the resolution and the money will be deposited into your account. The entire process is quick, easy, and safe. 

Another example of FinTech innovation that many customers have embraced today is payment transfers via smartphones or smartwatches. Although PayPal has been around for a while, new services such as Venmo or Zelle are changing the way we exchange money for everyday transactions. It is even possible to split a bill with friends using those apps. The crowdfunding platforms like GoFundMe allow almost everyone to build an easy way for people who care about an individual, circumstance, or cause to donate with a few clicks. And indeed, every transaction you want to make today is only a few clicks or taps away.

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You are probably wondering by now - is this all legal? And the answer is - absolutely yes! The financial sector is highly controlled and strictly regulated. It applies to digital finances as well. All the legitimate companies are following the standards such as KYC (know your customer), and you generally need to prove your identity to the provider. Customer protection is strong, and you have certain rights as well as duties. The financial sector in digital form is still fighting to gain consumer confidence and fully dominate the industry. And so far, they are being successful in that mission. 

In the era of digitalization, your data is protected not just by laws, but also by technology and different safety protocols, and data protection is the most important task of every company. Banks and other FinTech institutions are actively looking for new ways to use biometrics as an additional layer of protection for transaction authentication. In reality, major financial institutions have begun to invest in biometric-based authentication solutions. And you - as an end customer - benefit from it. For example, biometrics allows for easier authentication and removes the need for multiple passwords to be remembered. 

Though FinTech advances have been developing very fast, we have just scratched the surface of what is feasible and likely to happen in the coming years. New technologies are literally changing our lives and behaviors by allowing us to trade, deposit, and exchange money without having to communicate with a person or handle any papers. FinTech is making our lives easier, and we should all take all the advantages we possibly can, save our time, and most importantly - money.

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