Financial Technology

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Setbacks of Using Fintech

Fintech has become a big part of our lives, even if we don’t realize it. Fintech essentially refers to any financial technology and can fall into something as simple as the banking app you use on your smartphone or more complicated such as companies that focus on things such as mobile payments or insurance. Fintech has made our lives easier in a lot of ways, but like most things, it’s not without its problems. Here are some of the setbacks of using fintech.

 

Data Security

The rapid growth of financial technology in Europe led to a 78% increase in the number of people using it in 2020. However, this growth has been accompanied by unintended consequences. One of these is the rise of cybercrime, in which attacks occurs at least once every minute. Unfortunately, many of the companies that are using fintech are also being targeted by hackers. Due to the rise of digital money, the number of people who rely on financial technology to manage their money has increased significantly. This has increased the amount of data that banks and other financial institutions can collect. Unfortunately, this has also led to the potential for data breaches at major companies such as credit bureaus and foreign exchange brokers, such as Pepperstone, an Australian brokerage company that had its own customer data stolen in 2020.

 

Regulations

One of the biggest challenges the fintech industry typically contends with are the regulations that come with it. Government regulations and fees affect fintech banks in a big way, and they typically end up straining the resources of the bank. Regulations such as the Dodd-Frank Act and the Financial Account Standards Boards’ Current Expected Credit Loss play a big role in how a bank utilizes fintech, to the point where some may provide their customers with more limited options due to wanting to avoid compliance fees and the like.

 

Keeping Up With Evolving Tech

While operating through digital platforms can be extremely beneficial and sometimes even necessary for the survival of many financial institutions, making the actual jump to digital platforms can be costly and risky. Financial platforms that haven’t made the jump to digital need to make an important decision; do they take the risk in order to keep up and stay relevant, or do they stick with what they know and not have the same offerings as other platforms?

 

There are many drawbacks to using fintech beyond the three mentioned here, but many would argue that the pros outweigh the cons. As we continue to move through this digital world, financial institutions will have to do their research to see if investing more into fintech will ultimately help them succeed.

How to Help Eliminate Financial Stress

There is no doubt that financial stress can have a severe impact on not only our personal mental health but also on our relationships. In fact, according to a study conducted by the financial firm TD Ameritrade, 41% of divorced Gen Xers and 29% of Baby Boomers say that their marriages ended due to disagreements about money. While having your personal finances in order is no guarantee that you won’t still fight about money with a partner or spouse, it can go a long way towards creating your own good mental health and wellbeing. Here are three tips to help eliminate financial stress.

 

  1. Track your spending

 

It is a sad, unfortunate fact that in the age of credit and debit cards, many people have no idea how they actually spend their money or where it all goes. Before you can create a realistic budget, you need to understand and identify your personal spending patterns. While that $6 latte each day may seem like a small purchase, over the course of a month they can add up to almost $200 and maybe even more if you are inclined to be a generous tipper.

 

  1. Create a realistic budget and stick to it

 

Creating a budget is easy, creating a realistic budget that actually accounts for your legitimate spending habits and patterns is much harder. This is partially due to the fact that some of your bills will vary from month to month. While it is fairly easy to budget for static bills like your rent or mortgage or car and insurance payments, creating a realistic food or entertainment budget may be more challenging. Credit cards make it too easy to spend more than you make and making only minimum monthly payments makes it easy to just keep racking up that credit card debt. A budget can help you begin to spend less than you make, but only if you stick with it.

 

  1. Create margins

 

Studies have shown that 40% of Americans would struggle to come up with even $400 to pay an unexpected expense. While spending only what you make is a good first step, your stress isn’t really going to go away until you create some cushion for the unexpected. While not spending more than you make is a good first step, ultimately the goal is to spend less than you make.

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Increasing your Understanding of Fintech

Financial technology, also known as fintech, is the implementation of technology in the financial industry. The purpose is to improve the ways that financial services are created and delivered to consumers. Technology has also increased the availability of financial services, such as loans and investments, to every member of the public. There are several methods recommended to become more knowledgeable about the emerging field of fintech.

 

Improve basic skills in finance

 

Someone who knows nothing about finance cannot expect to become a fintech expert. The first step is to develop a basic knowledge of finance in a diverse range of topics from stocks to lending.

 

Learn the different sectors of fintech

 

Once the basics of the financial industry are learned, the next step is to learn about key fintech sectors. The most well-known areas include online payment systems, blockchain, digital lending and digital wealth management. Since millions of shoppers are buying their products and services online, the use of online payment systems has exploded in the past decade.

 

Blockchain technology has become more advanced as people exchange vast amounts of private information over the Web. It is commonly used in cryptocurrency to conduct financial transactions without increasing the risks of fraud.

 

Enroll in short-term courses

 

A short-term course is designed to advance a learner’s skills in every major fintech topic from blockchain to Python programming. A course also gives a beginner firsthand access to experienced fintech professionals. Students can receive hands-on training in the field and start building their financial portfolios.

 

Review fintech websites

 

It’s recommended that starter and experienced fintech professionals begin to track financial trends and statistics carefully. Every day or once a week, they should review websites that contain the latest news about financial technology. There are numerous blogs, sites and newsletters that provide regular updates.

 

The years 2000 from 2021 saw massive changes in the ways that consumers use financial services. Many individuals and business owners had no choice but to use online banking to transfer funds and perform daily financial tasks. Financial consumers are becoming more interested in using machine learning and artificial intelligence. In addition, fintech sector is constantly expanding to include new technology areas and skills. So, becoming a master in fintech starts with a solid foundation based on basic professional skills and knowledge.

What To Look For In Fintech In 2022

What to Look for in Fintech in 2022

Fintech has developed and expanded increasingly over the last decade, with firms leveraging technology, innovations, big data, and analytics. These developments are far from the last we’ll see in the financial sector; as new developments arise, everything that involves finance will be impacted by fintech. Here are some fintech trends to keep in mind as we draw closer to 2022.

 

Banking

 

Society is steadily leaning towards becoming cashless, and digital-only banks lend to this growing trend. Fewer people have physically needed to go to a bank and handle their financial issues, resulting in fewer lines and no physical cash to hold. Current online banks, such as the UK-based Monzo, Revolut, and Starling, have seen rapidly growing customer bases that force existing banks to rethink the focus on mobile apps. Fintech improvements continue to shift the banking industry, which has forced banks to close branches as a result. 

 

As customers continue to say they plan on converting to digital-only banking, it’s no surprise that a quarter of all bank branches are expected to close within the next three years.

 

On the other hand, open banking pledges to deliver more competitive financial services to both individuals and businesses. This banking method connects banks, third parties, and technology providers, consensually sharing customer data with authorised providers.

 

Blockchain

 

As digital ledger technologies continue to advance and interest in cryptocurrency grows, blockchain technology will continue to open opportunities to fintech companies. According to PWC, worldwide economies are expected to adopt blockchain technology at scale by 2025. Blockchain continues to disrupt the payment industry, with many people expecting it to become apparent in both the financial sector and, specifically, fintech. This technology enables secure payments and transactions for all who use it while removing the middleman, therefore reducing costs by a large percentage. Presently, cryptocurrencies have successfully used blockchain technology and are prepared to be incorporated into financial institutions, applying them to traditional banking operations.

 

Financial Literacy

 

Fintech also provides a way to improve people’s financial literacy, allowing customers access to easy-to-understand financial information so they can make sensible decisions about their personal finances. Not all people, for example, understand the importance of budgeting; not all people are completely informed of the details when making spending decisions. Fintech uses data accessible through open banking to inform customers about the best available choices for them. The hope is to continue educating people in financial literacy throughout 2022 so that everyone can make smart financial decisions.

How Has Fintech Impacted Different Industries

How Has Fintech Impacted Different Industries?

Fintech has spread massively over the years, to the point where it impacts more than just the financial industry. Thanks to the development of fintech, two types of products were created for the benefit of others: B2B and B2C. The first type, B2B, offers different financial services through fintech apps, while the second type, B2C, offers apps that are user-oriented for clients. The B2C model, specifically, was created to compete with financial service providers. 

 

From mobile apps to trading areas, fintech projects vary immensely and allow entrepreneurs to get their money without having to visit the bank. Here are a few industries that fintech has impacted over the years.

 

Funds Transfer

 

Transferring funds used to be slow and expensive. If you wanted to transfer money, you really had to think about when you would do it and when you needed the money transferred by if you wanted to get it done in time. However, with fintech, the funds transfer field started to develop; according to Think with Google, 69% of smartphone users transfer money using a mobile app rather than a website. Plenty of online services exist for money transfers, such as TransferWise. These services give small companies and private users the chance to send money to others at a lower price. 

 

Loans

 

Since many people have credit cards with certain payment limits, it’s possible to take out a loan online. Web and mobile applications such as KreditBee and MobiKwik allow people to use their sites and take out a loan quickly; users can usually apply and be approved for a loan in fifteen minutes. Once approved, the whole sum of the loan can be transferred to any banking card within an hour, and users can access their personal information (balances, arrears, etc.) quickly and easily. It’s no longer necessary to stand in lines and sign physical documents to get a loan; this trend could completely replace habitual crediting.

 

Chatbots

 

Chatbots are artificially intelligent bots that can, among other things, help improve the financial process. They can send notifications about changes to whoever is listed, provide helpful information to users, and more. Due to this, chatbots have increased user loyalty, which increases a business’s profit and makes a product more competitive. Several banks globally already use chatbots and have seen these results, using them to notify clients, help clients pay their bills, and so on. Some, like MasterCard, even have a chatbot for Facebook Messenger to improve digital services.

How Your Company Can Harness Fintech

How Your Company Can Harness FinTech

Covid-19 may have slowed down business, but Fintech has achieved double-digit growth in volumes and transaction numbers in the same period. In addition, many companies required employees to work remotely during the pandemic and needed to develop new working methods.

The fintech industry became the choice for businesses that needed to implement digital tools for working at home. Companies found out that Fintech has more uses beyond sorting disruption of traditional business practices. Some teams in accounting and finance found fintech tools can streamline operations, improve productivity and cut costs in these ways.

Simplifying complex processes

Corporations became less productive during the pandemic. Spend reconciliation was one way that finance teams could create efficiencies, but innovation in the area has been slow, and it consumes a lot of labor-intensive time.

Fintech reduces that challenge with tools to automate most of the processes such as:

  • Three-way matching to approve incoming supplier invoices
  • Complex and fragmented area travel and expense spend

Fintech tools can automatically link expenditures to individual employees and functions. As a result, they simplify and hasten budget allocations that are ordinarily time-consuming.

A company can harness fintech to provide greater visibility into:

  • Employee spending
  • Delivering control
  • Flagging out of policy expenditures real time
  • Automated analytics

Another upside is the chat AI that interprets customer questions. Requests increase efficiency by automating financial tasks that involve answering questions about expense processing and invoice payment.

Solution to Fraud

An ACFE survey found that organizations lose 5% of annual revenue to fraud, and detection can take 14 months. A third of all fraud cases occur because organizations lack internal controls.

The pandemic created a perfect environment for fraud as it thrives during recessions and economic instability. Fintech AI and machine learning algorithms in its software control fraud mastering standard patterns of company finance and flag anything unusual or new. The team in charge will notice and review. A/ML has a higher level of sophistication to root out fraud than the rule-based approach. The tools can search and compare data to sense questionable correlations or other irregularities.

The payoff for shifting to newer processes is transformation. Finance practices in an organization will gain the same benefits that the financial sector has gained by adopting Fintech tools. It only requires collaborating with a reliable Fintech provider.

Great Podcasts All About Fintech

Great Podcasts All About Fintech

Podcasts have become one of the most popular forms of media over the last few years, and for good reason. Practically anyone can make a podcast if they put the energy into it and podcasts can be about pretty much anything. One topic that has plenty of podcasts to check out is FinTech. You can find many podcasts covering the subject, with each one giving a different perspective than the other. Some may discuss news, while others may attempt to teach their listeners all about the subject. Regardless of what you’re looking to listen to, there’s a FinTech podcast out there for everyone. Here are a few great podcasts all about FinTech.

For FinTech’s Sake

Although this podcast is only around 2 years old, it’s easily one of the most popular and high-quality FinTech podcasts out there. Hosted by Zach Anderson Pettet, the show takes a look at what happens at the intersection between finance and technology, exploring the perspectives of founders, investors and, incumbents. Episodes of the show range anywhere from 20 minutes to an hour and a half, so you’ll get plenty of variety as well as many guest hosts.

Breaking Banks

Highly considered to be the #1 FinTech podcast in the world, Breaking Bank is hosted by Brett King, a FinTech expert who has written several books under his belt. The show takes a look at how technology and the way customers behave are bringing about changes and will continue to change banking over the next 10 years, as well as how it’s affected banking over the past 200 years. Every week Brett and his team discuss the most important financial topics and they’re constantly inviting new guests to give their own perspectives so you’ll always have something new to look forward to.

Banking Transformed

Technology has changed banking drastically, and there’s no denying that. But for some of us, that isn’t easy to accept, especially if you’ve been working in banking for a long time. Banking Transformed is hosted by Jim Marous, one of the top 5 banking and fintech influencers in the world. In each episode, Jim takes a deep dive into the impact that digital disruption has had on banking and will continue to have on banking, as well as the leadership and cultural challenges that come with it. Jim’s ultimate goal is to help listeners embrace the change and make the most of it because things will only continue to change with the passage of time.

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FinTech 101: What is a Green Bank?

What Is a Green Bank?
You may have heard the term “Green Bank” and wondered what it meant. This short article will explain the term and concept behind it.

Green Banks in a Nutshell
A green bank is a bank that exists for the sole purpose of battling earth climate change by funding projects that may be able to decrease the global carbon emissions and increase the use of alternative and renewable fuels and energy. They tend to support infrastructure spending in wind, solar, and other renewable energy space.

Green Banks: Functional Model
Green banks are not climate charities. Their funding is expected to be paid back with a profit for the bank. Currently, they are supported by some states in the U.S. and also by private funding. Green Banks utilize philanthropic and public funds. They generally fund energy projects that beyond the research stage and “good to go”. The Coalition for Green Capital (CGC) is a nonprofit agency that is deeply involved in advocating for green banks’ continued development.

Where Did the Idea for Green Banks Originate?
The idea for green banks started in 2008 when two entrepreneurial-minded, Ken Berlin and Reed Hundt, came up with the concept as part of the Obama transition team’s plans for promoting cleaner energy changes in US society. A proposal to enact federally supported green banks was attached to the American Clean Energy and Security Act. The concept never made it as legislation at the federal level. Green bank supporters were not daunted. Consequently, green bank advocates persuaded some states to take up the cause.

Green Banks: Some Statics
Currently, there are at least ten states that have at least one green bank. In addition, they are in the early stages of catching on globally as well. They also exist in Australia, the United Kingdom, and Malaysia. Within the U.S., green banks have already been involved in the funneling of some $3 billion in funds for clean-energy projects.

Green Banks: Their Future Development
With the advent of the Biden presidency, green banks may again find a firmer footing at the federal level. Indeed, in December 2020, Mr. Biden proposed the idea of a national green bank. They appear sure to gain more traction internationally as the desire to dampen climate change takes hold.

How To Forge A Career In Fintech - Jacob Parker -Bowles

How to Forge a Career in Fintech

Fintech companies offer innovative solutions to financial problems. They help banks to improve their customer service and be more flexible. Due to the growing popularity of the fintech industry, their jobs can be very rewarding. But what does it take to forge a career in fintech?

Start Small, Learn and Grow

Fintech is a booming industry, meaning that there’s more to be discovered. As a result, there’s a lot of opportunities in this industry. It helps to get into the industry with some experience in the financial sector.

However, it’s not necessary. A person with a law degree can learn on the job and become an expert in no time. Therefore, one shouldn’t procrastinate. If they think this is the industry for them, they should go for it. They can start at the bottom and work their way up.

What’s Fintech All About?

Fintech is an interesting industry because an individual works in two vast industries: technology and finance.

An example of an emerging fintech trend is open banking. Here, the bank allows tech startups to facilitate customer service and transactions through an app. The customer has to consent before using the app. Once the customer agrees, the bank discloses that person’s banking details to the startup.

Any person that works for the bank or startup is already involved in the fintech industry. That’s how easily one can find themselves working in the fintech industry.

Skills Required

There are three sets of skills that are important in the fintech industry: software and hardware engineering, finance, and communication.

A person with coding skills can work in the product development department. Their work will be to code programs or applications that can be used to improve the financial sector. The person with finance skills helps the coders comprehend what the app is supposed to do. The person with communication skills will help to monetize the fintech solution.

Finally, the fintech industry can be very demanding. If one wants to succeed, one has to consider work and personal life. They have to be in perfect balance. Too much work can leave a person feeling exhausted and unmotivated. Therefore, it’s always good to think about one’s health and happiness.

The Ins And Outs Of Cryptocurrency Mining

The Ins and Outs of Cryptocurrency Mining

Most people have heard of cryptocurrencies by now. Bitcoin and Ethereum are two prominent examples of this type of currency. Crypto is designed to be secure. It utilizes blockchain technology to create a secure record of transactions. Many people invest in crypto by trading through marketplaces, much like traditional ForEx markets. Of course, it’s also used for transactions. Cryptocurrency has the advantage of being anonymous. It’s very difficult to trace. Famously, this intense focus on security has made it very popular on the dark web.

Cryptocurrency is created through a process called mining. Miners also add new transactions to the ends of blockchains. Working as a cryptocurrency miner requires some seriously powerful computer technology. Traditionally, powerful graphics cards have been needed to conduct an effective cryptocurrency mining operation. Miners also need to be very proficient at math. It’s a competitive field, and being able to solve problems more quickly than other miners is essential to success.

These days, miners tend to work in large teams. It wasn’t always this way. It used to be fairly easy for an individual miner to get set up. In fact, in the beginning, there was really no financial reward for creating new blocks in a chain. The people who did this work simply believed in cryptocurrencies. Over the years, some big investors have been getting involved in the mining space. This includes big high street banks. Individuals have had to form larger groups in the hope of competing with these large groups.

The financial rewards of cryptocurrency mining are sizable. A newly-mined block can be worth up to 12.5 bitcoin. That’s quite a bit of money. Each new block needs to contain data proving that the miner who’s claiming it actually did create it. Essentially, they must show their work in solving the mathematical problems in order to get the reward. This is still a fairly wild marketplace. Japan has started regulating crypto, but only lightly, In other countries, there are still no rules.

It’s expected that this will change in the near future. For one thing, investors risk being burned and losing large sums of money. For another, it’s highly likely that governments will want to start collecting taxes on the capital gains associated with cryptocurrency transactions.

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