What is Fintech? The importance of Fintech to the financial industry?

The world is facing the Fourth Industrial Revolution. Here main là major technological change in the degree that it can create a revolution that fundamentally changes the structure of current society. One of its representatives is the revolution in the FinTech industry.

Fintech (Financial Technology) is the term used to refer to the application of new technologies to the delivery of financial services. Unlike the traditional financial market, consisting of two types of financial institutions (banks, financial companies, investment, insurance, securities …) and customers, the objects of Fintech include 3 parties, the impact back and forth:

• Financial institutions
• Fintech companies
• Customer

Fintech quickly becomes a potential tool with the ability to reshape the financial industry with strong impacts on its most important sectors.

The importance of Fintech to the financial industry.

With Fintech, P2P – peer to peer lenders (directly connecting borrowers with lenders on the Internet) have been able to shorten loan approval times from a few weeks in traditional banks. only a few hours left. In the field of investment management, giants like BlackRock and Vanguard, whose “robo adviser” service, use algorithms to automatically adjust their portfolios according to the customer’s risk-taking level. Some hedge funds are experimenting with using artificial intelligence so robots can learn algorithms on their own. In addition, services such as digital currency (Crypto Blockchain), crowd-funding services (crowd – funding), financial consulting (personal finance), insurance technology (Insur Tech), data management ( Data management) is also in the Fintech sector.

Fintech’s diverse applications affect almost all areas of the financial industry such as deposits, payments, insurance, securities, credit, risk management, etc.

Fintech changes market structure, the product structure and almost every aspect of the banking and financial system directly threatens the traditional financial mode. The technology industry, backed by financial regulators around the world, promises to make financial transactions simple, transparent, efficient and economical.

Fintech is one of the leading success signals for the 4.0 revolution, providing people with conveniences through comprehensive technology development, especially in the field of information technology. The impact Fintech creates once again affirms the importance that new technology brings:

• Change traditional financial service channels:

Strong development trend of Internet sales channels, especially in banking services such as Mobilebanking, Tablet Banking, Digital Banking, Internetbaking, .. etc ..

• High-tech application:

Bigdata is a specific example that helps analyze customer behavior to reduce costs but extremely effectively improve service quality.

• Changing the labor market in the financial sector:

The demand for high quality human resources will increase (good in both financial expertise and information technology)

The above impacts are not to mention the impact on modern social morphology. Can say the future of Fintech is the future of an entire financial system. Fintech itself holds the essential elements that make a revolution in financial operations such as: cost, security, safety, risk management, … etc.Fintech products are becoming more and more diverse and intelligent; investment continued to increase; booming fintech in US, Europe, Australia and Asia markets; Increasing cooperation between fintech and financial institutions, … etc … is the proof for the future as well as affirming the importance of Fintech.

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