Fintech, or financial technology, is a new technology that has been developed in so many countries. This new technology is changing the way people operate with money. Actually, this financial technology term has been used for years, since 1980.
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No matter what it is called, new technology always brings advantages and also disadvantages. Everyone should learn everything about this incredible technology. All details about financial technology can be found down here.
Fintech and Its Advantages
Financial technology brings so many advantages for people around the world. This technology is not like the traditional or conventional bank. Both financial sectors come with different advantages. Below are the advantages of financial technology.
- Offers greater accessibility
Those who need a loan must wait for the conventional bank to open during the working hours. If someone is in an emergency and needs a quick loan, conventional bank isn’t the best solution. Fintech is much better since it allows anyone to apply for an online loan easily.
Usually, financial technology will respond to applicants between 10 minutes and 48 hours. Some financial technology companies even serve their customers on weekends.
- Time optimization
When someone arrives at the traditional bank, he needs to wait for his turn to apply for the loan. The bank doesn’t want to know if the applicant is in a hurry or emergency. All applicants still have to wait for their turn to apply for the loan.
With fintech, applicants don’t have to leave the house. Simply turn the internet on, apply the loan, and then the company will transfer the money to applicants, as long as they pass the verification and validation.
- Various services available
Financial technology manages to segment its services in order to provide a range of services that meet the needs of financial services providers and users. For the users, available financial services include opening accounts, applying for credit cards, insurance types, and international financial markets.
For the providers of financial service, fintech offers various solutions such as analyzing the credit applicants’ profiles, filling the cloud storage with data, streamlining the payment methods, and many more.
- Reducing cost
Another thing that makes financial technology different from traditional bank is that most financial technology companies are now offering commissions that are lower than the ones offered by the conventional banks.
Fintech and Its Disadvantages
From the details above, it seems like a financial technology company is the better solution than conventional banks. But actually, financial technology isn’t that perfect, it also has some disadvantages. Here are some disadvantages of financial technology.
- Lack of physical branches
If the company’s service is facing a problem, everything should be dealt with via social networks or email since the company lacks physical branches. Also, fintech with no physical branch will only be able to help those who are familiar with networks and the internet.
People who are used to going to the bank won’t be able to use the service provided by a financial technology company if the company doesn’t offer a physical branch.
- Lack of regulation
Fintech grows super easily today, even the smallest financial technology company can gain customers easily. Unfortunately, the regulations about financial technology around the world are still not perfect. This is dangerous since financial technology is a sensitive sector.
Lack of financial technology regulation may cause potential fraud. Many illegal financial technology companies are growing fast and killing people around the world, especially in developing countries. Governments need to be firmer in regulating financial technology companies in their country.
–Fintech is a crucial sector yet also sensitive and can be dangerous. Financial technology comes with many benefits but it also carries some disadvantages. Everyone needs to learn about financial technology before deciding to use the services offered by financial technology companies.