Last Updated on March 23, 2023 by Guest
Did you know that when you send your friend five bucks for coffee, you take part in a revolutionary experience? Because Fintech is evolving, and soon it will be a part of all kinds of businesses. But most of all, financial technologies are changing the commerce domain.
What is Fintech?
In simple words, Fintech is everything connected with using technologies in the financial sphere. It involves any business providing online financial services through software, mobile payment apps, online banking, and cryptocurrency.
Fintech products aim to simplify the life of retail customers and businesses. Technologies help us manage funds, pay for goods and services, transfer money, and use different banking services. For instance, open a savings account, get a loan, pay utility bills, manage insurance, and more. In recent times, Fintech applications have also allowed you to trade stocks and crypto markets.
Come to think of it, Fintech provides a convenient option to participate in financial services without intermediaries like banks. Because in our modern world, about 2 million people cannot open a bank account for different reasons, Fintech gives consumers access to financial services through easy-to-use technology. And this is what this technology was invented for.
Breaking the borders
Can you imagine a world without online shops? Get back in time for a few minutes and remember how you spent a day or two crossing the mall forward and backward to find the thing you were looking for. Now you can order something online even if the store is located far from you. And the best part is that you can pay for it while sitting on your couch. The advent of secure payment platforms and digital wallets has completely transformed payment processes, allowing e-commerce to flourish worldwide.
How are your payments secured with Fintech?
- SSL encryption guarantees a secure connection and sharing of any data you enter on the website. Organizations giving SSL certification are regularly audited and qualified to issue industry-standard security and authentication certificates.
- Some Fintech companies use tokenization. According to this approach, the user’s sensitive data is encrypted using randomly generated characters called tokens. So the merchant’s servers store tokens, not the actual payment card details.
- PCI compliance testing is mandatory for digital payment security. Test results can reveal potential vulnerabilities arising from poor system configuration, hardware or software flaws, or operational imperfections. So look for the PCI DSS compliant companies to conduct your payments.
Simplified funding of your business and everyday needs
Small and big companies and startups need the right kind of financial assistance in terms of financial literacy and project funding. It shouldn’t surprise you that traditional banks are hesitant to lend to startups or SMEs due to the lack of credit ratings, and this is where Fintech companies come to the rescue.
Using technologies that support alternative data for decision-making, Fintech platforms give loans without long credit scores. The AI and machine learning used by Fintech makes it easy to customize loan conditions according to the different needs. The streamlined approach to lending allows small businesses to grow faster and expand. And customers get more flexibility in their everyday spendings.
One of the standard solutions for both businesses and retail customers is a crypto-backed loan. All you need to get the loan is to open an account on the crypto platform and digital deposit currencies. For instance, with the CEX.IO Loan service, you can get cash in a few clicks without selling your cryptocurrency. If you’re new to crypto, you can buy BTC, ETH, or USDC by simply paying with your card. Answering your security concerns, CEX.IO is regulated, licensed to operate in different countries, and PCI DSS compliant. So, buying Bitcoin with Visa and Mastercard is secured here.
The main benefit of getting a crypto loan is that you don’t lose the potential of your crypto holdings. Some traders use it to leverage their capital.
Enhanced digital marketing
With superior and proven analytics capabilities such as AI algorithms, Fintech companies can quickly identify consumer purchasing behavior and help businesses efficiently set up their marketing campaigns. By using Fintech, e-commerce sites can boost sales at lower costs and efforts than with traditional methods. For customers, this means relevant offerings according to their tastes and needs.
Blockchain as a Fintech
Payments and personal data protection
Blockchain is a unique technology for decentralized and cryptographically secured payments, funds transferring, and data sharing. Each network member is anonymous, but it contributes to the security of transactions rather than creates a threat. Your blockchain account or your crypto wallet is protected with numerous authentication steps, one of which is a private digital key. To verify a transaction, you should sign it with your private key, and miners should use their computing power to add the transaction into the block. In case of successful validation, miners receive a reward. No one knows which transaction is confirmed by which miner. Everything is done with the automated blockchain process. This approach eliminates human errors and verification steps presented in traditional banking systems.
Freedom of the money transferring
With the help of blockchain, people can transfer any amount of money to far distances in a few hours or minutes. All you need is a good internet connection and a destination wallet address.
Automated solutions with smart contracts
Ethereum competent contact opens more possibilities to use blockchain in different spheres of our life. Smart contracts are pieces of software with the built-in ‘if-then algorithm. You need to decide the conditions, and the blockchain will execute the contract when they’re met. In other words, you and your customer need to sign a contract that states how much money you should get when you deliver the product. You’ll not receive the payment until you send the purchased goods to the buyer. And the recipient will not be able to get the ordered product until the payment is made.
Nowadays, intelligent contacts are used for building Fintech platforms and dApps of different needs.