How FinTech is Transforming Financial Services and Ushering in  an Amazing New Normal 

The past few decades have been a golden period for technology and digitisation. We are  now so used to using technology in our daily lives that we cannot imagine how we survived  without it. One area where technology has made deep inroads into the human experience is  financial services. 

Thanks to FinTech, many of us don’t need to use paper cheques, visit a bank branch to update  our passbooks, or fill out lengthy forms to meet RBI’s know your customer (KYC) requirements. And these are just some of the most visible implications of FinTech. The  “marriage” between traditional financial services and technology has deeper implications in  many areas like CredAble and Upscale are changing the way of working capital landscape  globally. Let’s take a look. 

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How FinTech Has Revolutionised the World As We Know It 

The term “FinTech” refers to the integration of technology into the financial landscape. In the  21st century, we think about FinTech in terms of virtual banking, automated portfolio  managers, digital wallets, equity trading platforms, cryptocurrencies, working capital  financing platforms, and B2B financing applications. 

FinTech applications promise greater convenience, ease of use, and accessibility to users. Moreover, FinTech companies like CredAble prioritise user experience through enhanced  functionality and customisation. 

Traditional financial institutions that require tons of manpower, money, and regulatory  clearances to function and grow. This limits their agility and ability to innovate. In contrast,  FinTech firms serve customers through scalable technology-based financial services. And  since they leverage existing infrastructure, like mobile and computing networks, they are  able to reach more users with innovative new products and services. 

All of these factors have contributed to the recent galloping progress of FinTech and helped  to democratize financial services for a vast number of users – both individuals and  businesses 

FinTech and Personal Finance 

Millions of users worldwide use FinTech tools to pay bills, track spends and savings, create  budgets, consolidate debt, make contactless payments, and more. FinTech innovations are 

also bringing investment and wealth management into the mainstream. Services that were  formerly reserved for investors with a large investment corpus and funds to hire professional  investment advisors are now available to everyone. 

Other new platforms have cropped up recently, creating a democratic marketplace for  financial products and enabling individual investors to trade in cryptocurrencies.  Robo Advisors are another fast-growing FinTech sub-sector, providing users with customized  investment advice based on their unique risk-taking capacity and financial goals. 

FinTech and Lending 

Traditional lenders can usually access very limited data to perform risk assessments on  potential borrowers. As a result, they either deem a huge number of people as ineligible for  loans or charge very high interest rates that are unsustainable for a majority of borrowers. 

FinTech inserts technology into the risk assessment and onboarding process. This enables  lenders to access and factor in more data to determine a borrower’s credit-worthiness. Such  data-driven decisions help to expand the lending ecosystem and allow millions of previously underserved or unserved people to access much-needed capital.

Such data-driven decisions help to expand the lending ecosystem and allow millions of previously underserved or unserved people to access much-needed capital, such as government contract work, which can now obtain government contract financing or construction contract financing

FinTech for B2B 

B2B FinTech companies are changing the way SMEs function and grow. FinTech applications are streamlining many enterprise processes that typically require a lot of  manpower and paperwork, such as supply chain financing, invoicing, and treasury  management. 

They are also playing a part in reducing corporate customers’ risk exposure. For example,  the process of assessing risk over multiple forex markets was previously riddled with human  error that could result in huge losses for companies. But technology automates the risk  assessment process and seamlessly integrates it into day-to-day operations, reducing  companies’ exposure to foreign exchange risk and minimizing the potential for loss. 

Lending is another crucial area where FinTechs are making an impact in B2B, particularly  among SMEs. Banks are usually apprehensive about lending to smaller, potentially volatile  businesses with little or no credit history. SMEs too are wary about the red tape and high  interest rates typically associated with banks. 

Moreover, FinTech removes the pressures of limited working capital, allowing SMEs to grow  faster and earn higher profits. 

How the World is Adapting to and Embracing FinTech 

In recent years, more users are switching to digital banking solutions like contactless  payments, P2P fund transfers, and international remittances. They are also demanding  easier, low-friction digital KYC processes. Many Indian banks have launched API platforms, 

which allow non-financial companies to leverage the power of “embedded finance” to provide  financial products to their customers and enhance customer journeys with integrated, value added services. FinTech makes all of this possible. 

Millions of users are also using blockchain-powered smart contracts that speed up  transactions and reduce costs. They also protect data integrity, allowing participants to trust  each other and complete transactions with minimal hassle. 

FinTech is also contributing to the increasing popularity of digital signatures. The elimination  of wet ink (paper) signatures allows users to save both time and money. Plus, digitally  signed documents are legally binding, eliminating complications due to regulatory  requirements or disagreements – in personal banking services, business loan clearances,  and many other areas. 

The Future of FinTech 

In the future, more and more consumers and businesses will demand innovative financial  services, higher speeds, efficiency, and ease of use. Traditional financial institutions will not  be able to keep pace with these developments. FinTech will fill this void with automated and  digital services like video banking, AI-powered chatbots, roboadvisors, and digital lending  platforms. The demand for blockchain-as-a-service and applications like cashless payments  and smart contracts will also increase. 

Smart financial organizations will realize that instead of competing with FinTech firms, they  are better off partnering with them through open banking and other technologies. The  smartest ones will partner with FinTech providers like CredAble and use their platforms to  offer customized solutions to their clients. 

Think Working Capital, Think CredAble!