Financial technology, or fintech, is a term that describes the use of new technologies to deliver products and services. In the past, many of these were behind-the-scenes systems at banking institutions, but today they also include consumer-oriented services like personal finance apps and robo-advisors and business-oriented solutions such as blockchain and cryptocurrency.
The rapid advancement of fintech presents opportunities for financial institutions, new entrants, and consumers alike. It can reduce transaction costs, improve efficiency, and expand access to financial services for under-served populations. But it can also pose risks to market outcomes and financial stability. To address these challenges, policymakers need to understand fintech and how it is evolving.
As the global economy continues its post-pandemic recovery, many traditional financial institutions are embracing fintech to improve their services and remain competitive. For example, they are deploying fintech for fraud monitoring and to automate accounting processes. They are also using it to increase customer-facing activities such as retail banking, mortgages, and small business loans. In addition, during the COVID-19 pandemic, they used fintech to help their customers secure government assistance.
Other examples of fintech include peer-to-peer lending (which cuts out credit card companies), crowdfunding platforms that enable individuals and businesses to seek funding for projects, and digital wallets such as Apple Pay that can hold both debit and credit cards. But one of the most important applications of fintech is to promote financial literacy. This is critical to enabling people to make informed decisions about their money and how they can best invest it. https://greyjournal.net/hustle/work-tech/navigating-the-new-challenges-for-fintech-startups-in-a-changing-economic-landscape/