Fintech looks to be the new buzzword, so what’s that all about?
For one, it would not even be a buzzword if it didn’t contribute anything to the financial user experience. Looking at this timeline of this trillion-dollar global industry, here are some problems it looks to tackle currently and in the nearest future.
1 Transaction Authentication
Today, the highest form of authentication we have on diverse payment channels is the PIN. This has long worked for mobile banking platforms, internet banking services, credit and debit cards.
However, even banking institutions know that the PIN model is flawed, leading to a step in the area of biometric automation.
This will not only help users avoid fraud but also prove a powerful asset for financial institutions in regulating and preventing cybercrimes.
2 Financing and Lending
Banking institutions rely on data from credit scores to make lending decisions. That is the sole metric used by many of these institutions today, making it almost impossible – if not impossible – for certain individuals to access financing and loans.
Fintech sees this as a problem, and it is working towards the implementation of platforms that will cater to such individuals. Leveraging such concepts as P2P lending and institution-backed financing, the end goal is truly in sight.
Working with AI, models can be developed to see through financial transactions before they happen at all, flagging fraudulent acts and nipping them in the bud. This is a kind of ‘protection even while you sleep’ model which takes on the work of a watchdog.
Of course, this will not be the end of all security problems, but a means to an end. Thus, users will also need to be on high alert for possible fraudulent activities, take proper education against phishing attacks, ensure accounts and networks stay as encrypted as can be for improved security, and more.
4 Wealth Management
Quite frankly, there are a lot of wealth building, investment and portfolio management strategies out there today. In fact, banks are now increasingly hiring experts that can walk their customers through how to properly manage and grow their wealth. However, not all these plans work for everyone.
Fintech can solve that by leveraging AI and machine learning (ML) to comb through individual users’ financial history, helping to come up with the best strategies for them.
This not only supports the supply of personalized services as deserved but boosts the chances of such models working for the said consumer.
About the author:
Brad Smith is a technology expert at TurnOnVPN, a non-profit promoting a safe, secure, and censor-free internet. He writes about his dream for a free internet and unravels the horror behind big techs.