Artificial intelligence

What Is Fintech, And Why Are They The Future Of The Financial Sector?

The financial sector is an engine of our economy, crucial to underpin the recovery we are beginning to build. It is also vital in terms of employment since last April it signed 6,459 contracts. But the main challenge facing the sector is the digital transformation that is pending, and that is going to revolutionize the business as we know it.

A revolution that responds to the change in customer consumption trends. The pandemic has fueled new habits that younger consumers were already practicing. They are more demanding, more informed customers committed to a different way of communicating with companies. This digital and multi-channel way is far from the traditional uses of banking.

This evolution has as a great protagonist Fintech, whose financial and stock market activity is carried out through new technologies.

What Is Fintech?

In general terms, a Fintech is a company that incorporates technology into its financial processes and services to automate or improve them and reduce costs. Therefore, a company is considered a Fintech when it provides a service in the financial sector through technology. The company does not necessarily have to carry out the activity of transferring money digitally. Still, it can be in charge, for example, of digitizing the contracts that banks generate on paper.

As data, it is interesting to know the origin of Fintech. That is born from the union of two terms in English, “ Finance ” and “ Technology,” which give rise to what we know as financial technology.

It is essential to remember that Fintech not only bring advantages but also involve risks in some aspects, such as cybersecurity or the lack of precise regulation.

How Does Fintech Work?

Fintech companies use blockchain technology that allows them to collect all the transactions carried out between consumers in blocks of information in a decentralized manner.

They generally do not have branches or physical points of sale and have automated most of their internal processes, allowing them to be more competitive compared to traditional business models.

Fintech companies offer online financial products anytime and from any smart device, thanks to disruptive technologies, flexible structures, and agile methodologies.

The exponential growth of the Fintech sector has revolutionized the banking sector and revealed a job opportunity since more and more professionals specialized in the field are required.

What Services Do Fintech Offer?

Fintech companies offer different services with a common purpose: they seek to facilitate access to financial services by applying new technologies. In other words, Fintech provide financial services faster and more accessible with lower commissions than traditional financial institutions.

Therefore, Fintech not only offer financial services Outsourcing such as access to means of payment, digital wallets, or loan platforms but also, due to their online nature, they facilitate access to these services for the entire population. In addition, these companies usually apply a customer-centric approach to their models, which allows, if the situation requires it, to offer ad hoc services immediately and personalized.

How Do Fintech Make Money?

Most Fintech companies make profits through assets such as subscriptions, third-party financial services (mortgages, loans, credits…), and advertising.

The New Financial Professional

Companies in the financial sector that do not know how to attract the best talent may find it challenging to compete adequately in this crucial situation and not take advantage of the many opportunities that the long-awaited recovery will undoubtedly offer.

The new financial professional that these times demand is characterized by skills and abilities in new technologies. Blockchain, Artificial Intelligence, or big data are becoming essential in an incomprehensible sector without innovation. Therefore, financial talent must always be trained in the new trends that the sector offers to take advantage of all the possibilities that technology offers.

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