Financial technology is nothing but the latest innovation and technology that aims to outpace traditional financial instruments in the provision of financial services to people. In fact, it is an emerging field that makes use of advanced technology to enhance financial activities in finance. Finance technology covers a wide range of activities which include financial engineering, financial service design, financial economics, and software applications for financial services management. The aim of this emerging science is to provide better ways of providing financial services. To make things more interesting, finance is not only restricted to banks and other such financial institutions.
There are several other institutions and organizations that make use of financial technology for the purpose of enhancing their entire financial services system. In fact, a financial technology degree can be obtained by students who are interested in working in banking or any other related field. Good knowledge of finance is essential in such organizations. Apart from that, the financial technology degree also helps professionals to open new careers in banking and other related sectors. A finance technologist is usually required in all banks, financial institutions, and insurance companies to work as computer programmers, information systems administrators, financial analysts, and risk managers.
A few years back, a few financial institutions started using distributed ledger technology for the purpose of providing efficient financial services to their clients. The distributed ledger is also called blockchain technology. This specific technological advancement enabled a number of financial institutions to operate more efficiently and effectively.
Financial technology helps in improving the overall efficiency and productivity of banks and other financial institutions. Basically, financial markets are made up of various parts. Blockchain is one such part where transactions are processed in an automated manner. This particular feature of a certain kind of technology helps in reducing the complexities involved in manual tasks such as debit card authorization, online payment authentication, and credit card authorization. This also enables banks to complete different kinds of business deals in a shorter time.
There was a time when the biggest challenge for banks was how to process huge amounts of credit card payments. Fortunately, there came up with solutions like the electronic transfer system or EFT. Now, even small banks are trying out this kind of system to help them perform better. However, the question here is where do we find financial technology startups in Chicago? Well, if you want to participate in such an innovative industry, you have to look no further than the famous incubators such as The Demo Lab at Delevan Illinois, Coinsurance Lab at providence college, or the accelerator startups in Chicago itself. If you are wondering about their locations, well they have offices in New York, Boston, San Francisco, Washington, DC, Las Vegas, and Silicon Valley.
While all these companies are still in the early stages of development, there has been a surge of companies that are looking for ways to reduce their operational costs while at the same time enhancing their revenue through new ways of doing business. They are trying out different approaches to increase customer satisfaction, streamline their internal structures, increase their market share, or minimize their market risk. In essence, they are trying out alternatives to traditional financial services such as Electronic Funds Transfer and electronic remittance.
What makes these startups exciting is that they can use a combination of financial technologies to address their goals. For example, some of these companies are looking into innovation in order to provide online access to their customers. They can also use cutting-edge investment management systems to track every aspect of their client’s portfolios. At the same time, banking startups can make use of technologies to streamline their business processes, cut costs, organize the way to fund their startup, and improve their profitability. Banking startups interested in innovation will have to come up with innovative solutions to tough problems like underutilization of certain assets, lack of proper distribution of capital, and lack of trust in financial institutions.
However, there are downsides too. One of the biggest disadvantages of fintech startups is that they run the risk of being seen as an opportunist who steals other people’s technological innovations. They might be able to attract more customers to their banks by streamlining their operations, but eventually, this would also mean less revenue for the banks. Another possible downside is that as competition grows stiff, traditional banks might start competing with these new entrants by providing better deals and terms. The best way to deal with the threat posed by fintech is for banks to find a common ground so that they can both benefit from it.