The phenomena of fintech can be regarded as a revolution in personal finance management inside the USA. Such technologies in financial services improve the sector by enhancing a smooth flow of these services.
The result is that fintech firms are finding ways to fill gaps left by conventional banks or improving the quality of life of millions of Americans in terms of their financial status.
Another way by which Fintech has affected financial services is through the provision of the services to the masses. Through the use of technology, these players make financial products easily accessible to the clients in banking, investment, and credit, which were previously accorded to the high-income earners.
Evolution of financial technology
The advancement of financial technology is in a constant state of development and proved to be revolutionary. Thus, during the recent ten years, fintech has become an inalienable part of people’s lives in the United States.
Innovations in the financial sector have now advanced to mobile banking apps up to blockchain technology making the financial industry more dynamic. To start with, the concept of financial technology covered only simple services like Internet banking.
However, with the improvement of the technology of this commodity business, so did the domains of services provided. Fintech in the present world has evolved to include many forms ranging from the peer to peer lending and robo-advisor to trading in cryptocurrencies.
Key players in the fintech landscape
A few important actors can be identified in the context of the fintech space as useful contributors to the sector’s development. Platform like PayPal, square and Robin hood have become familiar brands due to their uniqueness in online payments, small business transactions and stock trading.
Square has a simple Point of Sale and low-cost methods of transaction for merchants; small business have benefited from the services provided by Square. In the same instance, Robinhood has leveled the playing ground for stock exchanging by availing free commission trades and obtained a novel band of investors.
Also, emerging companies such as Stripe and Plaid have a significant part in the fintech industry. Stripe has basically reduced the headache of payment processing for the online store owners whereas Plaid provides the plumbing that allows an app to talk to the user’s bank.
The role of regulatory bodies
The financial sector has evolved rather quickly, which has led to the increased regulation of fintech organizations. Thus the regulation of consumer interest while encouraging innovation has been quite a tricky proposition.
Many financial technology companies including the widely used peer to peer lenders and online lenders are regulated by bodies like the SEC and the CFPB among others. Among the main areas of concern has been the formulation of rules and frameworks that would encourage innovation while at the same time, protecting the consumers.
The new innovations coined under fintech have attracted many regulatory policies such as the General Data Protection Regulation in the USA (GDPR) and the Payment Services Directive 2 (PSD2), which have affected the operation of those firms.
These are s some of the measures which strive to increase transparency, secure mobile payments, and safeguard user’s information. Thus, through ensuring a secure and fair financial environment for the provision of financial services and products, regulatory bodies play an important role of ensuring consumers’ confidence in the emerging future of fintech services.
Impact on personal finance management
Thus, it can be stated that the influence of fintech in the sphere of personal financial management is rather significant. Due to introducing easy to use and understand platforms, fintech businesses have changed how people discover, organize, and improve their money.
Whether it is budgeting applications, investing apps or other economic applications, personal finance has become as easy as it has never been. Mint or YNAB (You Need A Budget) are similar applications that have already found their place for personal use in people who want to be thrifty and stick to the budget more or less.
They all have live, easy to use interfaces that allow the user to track their expenses to be able to make sound decisions. Another feature in them is goal setting, tracking of bills, ways, and categorization of expenses.
There are also various forms of automated investment platforms also known as robo advisors. Robo-advisory firms like Betterment and Wealthfront, employ formulas to design investment portfolios that cater for risk tolerances and or returns expectations.
Future of fintech
Thus, the possibilities of further fintech development seem rather promising. New methods like AI and machine learning along with elements like blockchain will also continue to transform the financial industry in future.
All these advancements hold the potential of increasing the levels of efficiency, security, and customer appeal in the provision of financial services. Mores can be made for custom investment advice, better fraud control and efficient use of Chat bots through artificial intelligence and machine learning.
On the other hand, blockchain technology poses the possibility of more secure and less shady transactions and may even redefine the existing markets of, for example, healthcare and property.