When it comes to professional financial services, technology is completely changing how the service is provided. Assignments that professionals once completed using paper currency, outdated computers, and face-to-face meetings are now being completed by using digital solutions. This has led to an eruption of startups that provide financial technology worldwide. The change has allowed new companies to emerge, and old companies trying to cash in on the new benefits.
The umbrella term of FinTech has made its way into mainstream financial services. FinTech is any type of technology that provides, or assists, a financial service. Some obvious examples are the mobile application of a bank, online trading platforms, and robo-investing.
The start-ups introducing this type of technology, are ahead of the game. Older organizations need to utilize some of the FinTech tools, as a means for keeping up with the same innovation.
Blockchain also looms in the financial world – and has the potential to completely overhaul the way the world sees finance. Contrary to popular belief, blockchain is not merely an innovative idea being tested by startups, but is an emerging technology being studied by seasoned institutions as well. What does the blockchain do for the tech world? To keep it simple, blockchain is the technology that saves and keeps track of all Bitcoin transactions. The potential overhaul that blockchain presents is the potential elimination of “big banks.” This is due to the fact that blockchain eliminates the high fees and costs of the banking services.
Robo-Advisors are another type of FinTech that are becoming increasingly popular in finance. These services provide investment advice and portfolio management all through AI and technology. Those who seek an account with a robo-advisor choose from different services available. Popular ones include Wealthfront and Betterment. Investors are then able to fill out a questionnaire, and an algorithm will advise them on the best investment opportunities for their portfolio.
If success with these financial solutions shows greater success than traditional financial advisors, robo-advisors have the potential to completely wipe out this profession.
The constant change of technology has not passed over the financial field. Instead, a broad term – FinTech – has been created to encompass all financial technology. Within FinTech are digital solutions like the blockchain and robo-advisors, which have the potential to completely overhaul the financial world.