Ever since childhood, we have heard many stories about going rags to riches. Many of us have wondered if there’s any secret sauce for wealth and anticipate someone to show it to us. Many brands tell you these same stories to create brand awareness, increase presence, generate leads, and ultimately make money. These kinds of stories are focused on triggering our emotions and react to making money quickly, cheat sheets, Quick Investment tools, Get rich soon courses, and tricks.
Investments in Fintech are no different. In and of itself, Fintech has many stories such as Bitcoins, Instant banking, its Market growth in recent years, its relation with the pandemic and cashless society.
But profitable investment strategies and tools seek more than just stories; they demand numbers. One should look at facts and figures, which should be the initial step while investing.
The term Fintech is the abbreviation for Financial Technology. It refers to an innovative use of technology in providing financial services to the economy with the aim to improve the efficiency and effectiveness of banking. Nowadays, every application online is integrated with at least one fintech software. The application of technologies is led to other aspects such as lending, advice, payments, etc.
But let’s go back to 2008, the financial crash. It has eroded the foundation of the finance world for good. All the traditional inviolable banking beliefs have changed due to the economic depression; this led to rapid growth in Fintech. Most of the FinTech startups are reshaping the financial activities by providing services 24/7 on digital devices like mobiles, laptops, and other portable devices.
With that said, now are the five essential facts that you should know about Fintech and investment in Fintech:
- Fintech is Regulated:
Despite all the upside of integration and automation of financial service with technology, it carries within itself some of the dangers such as investment fraud, money laundering, system risk ( Malfunctions ), Cyberattacks, securities of cryptocurrency, etc. Many prior traditional regulations failed to apply to the fintech industry, as fintech operators do not function as full-fledged banks and institutions. This unprecedented change has led the concerned governing bodies to understand the present operating models and reformulate rules accordingly. Many countries have their financial models, so there’s no single set of rules applied in all the nations. Different countries have their own cybersecurity rules and policies.
- Fintech has many different models:
Fintech encompasses everything that integrates finance and modern technology. And there’s no thumb rule as to what counts as Fintech and what doesn’t. But here are some of the significant fintech categories:
i) Cryptocurrency and Blockchain:
Features like smart contracts, Peer-to-peer transaction, Digital wallet, transaction delivery, payment gateways, digital insurance, and more are the prime services of Blockchain and Cryptocurrency
ii) Insurtech: Many fintech startups are providing insurance of great value along with other transactional features. These brands use integrated features like smartphone apps, IoT, AI, and other tools to provide more impactful service to their customers
iii) LendTech: Fintech startups make instant and real-time lending a reality. This category uses technologies to offer loans to consumers by streamlining the entire process from A to Z. AI and Machine learning is used to process loans, assess paying capacities, verify credentials, collect payments, and ensure smooth functioning
iv) And many major other categories integrate AI, Machine learning technology with financial services like:
e) Banktech, and more
- Fintech Investment requires less experience and knowledge:
The vast majority of the demographics can’t sit in front of the computer, analyzing commodities and stocks to calculate their performance. Nowadays, many Investment Apps allow you to manage your investments, portfolios, assets by enabling you to buy and sell assets instantly from any device. This list of the top investment apps can help you scale your investments quickly by saving your time and efforts.
- Fintech is one of the fastest-growing industry:
As our world pivots back to its normal state by adopting precautionary measures like social distancing, remote working, cashless transaction, etc., it’s safe to say that Fintech will grow disruptively in the coming years.There’s no stopping drastic technological improvement, and it’s reshaping our lives like never before. Many experts have predicted that, in a few years, cars will automatically pay the toll, refrigerators will order groceries automatically on standing instructions, and people can enter stadiums or any public place with the digital tattoo from vaccinations. Fintech can have a promising return on your investment.