Simran Gambani, S.E IT
“The changing nature of money is only one facet of the financial services revolution.”
-Scott Cook
Money dictates our life. The need of managing our assets, looking up ways of earning, the dire requirement of enough finance can never be met. The industry scales up our personal financial problems to economic services, which encompass a broad range of businesses that manage money, including banks, credit-card, insurance, accountancy and consumer finance companies, stock brokerages, investment funds, etc. This defines Financial Services. Technology is upending workflow and processes in the financial services industry. Tasks once handled with paper, bulky computers, and human interaction is now being completed entirely on digital interfaces. Every type of financial activity is being re-imagined and re-invented using technology. The new technology and innovation that compete with the marketplace of traditional financial institutions providing financial services are called financial technology a.k.a. Fintech.
Fintech is a new financial industry that applies technology to improve financial activities. It has transformed the way money is managed. Let’s dive deeper to glance at some recent disruptive financial innovations!
The first innovation is bitcoin. Bitcoin is a cryptocurrency and an electronic payment system released as an open-source software. The system is peer-to-peer, and transactions take place between users directly, without an intermediary. The system is based on secure wallets managed by the users themselves, and a distributed ledger that is the bitcoin blockchain, which uses bitcoin as its unit of account. Bitcoin is called the first decentralised digital currency that works without a central repository or single administrator. Here, the true innovation is not about the currency but is about the bitcoin blockchain. From the customer perspective, the operative word is low cost — the system is open, and as there is no central authority necessary, there are therefore no fees associated to intermediaries.
Another are Financial APIs(Application Programming Interface). The APIs have been used for many years by software developers to assemble program components within an application and improve interaction with it. The new use of APIs is to make business functions available as components on the Internet (think how Google Maps can be integrated into other applications and websites). APIs are the tools that allow financial service companies to enable connectivity, to offer their customers, their staff, and their business partners new tools that streamline operations and improve existing services. As the amount of data that companies in the financial services industry have to manage grows exponentially, financial services companies use APIs.
Automation in Finance