Essay On Managerial Finance

Fintech technology is the new form of financial organization that smears technology to enhance finance activities (Leong & Sung, 2018). Fintech deals with the innovation and technology that aim to contest outdated financial approaches in distributing financial services. It is also a developing organization using technology to advance financial activities (Guild, 2017). Financial technology organization contains well-established financial organizations and start-ups; these technological organizations are trying to enhance or replace the financial services provided by current financial organizations (Leong & Sung, 2018). For Example, smartphones are used for mobile banking, borrowing services, investing, and cryptocurrency to make financial services more reachable to the general public. Fintech company defines any business that practices technology to improve, adapt, or automate financial amenities for consumers and businesses (Leong & Sung, 2018). Examples include peer-to-peer payment services, mobile banking (Cash app, Venmo), automatic portfolio managers (betterment, wealth front), and trading platforms like Robinhood. It can also apply to the trading and development of cryptocurrencies (Ether, Dogecoin, Bitcoin). This essay will further shed light on how financial technology enhances business operations by using fintech technology and how organizations benefit from fintech solutions.  

 

Fintech trends that continue to grow in 2022 are that digital banking continues to grow in upcoming years, and digital baking has become more accessible to access than previously (Guild, 2017). Numerous consumers manage their money, pay and request loans, and buy insurance through digital-first banks (Rabbani et al., 2020). This convenience and simplicity will likely drive extra growth in this sector; with international digital banking platforms probably growing at (CAGR) compound annual growth rate, by 2026, it is expected to reach 11.5% (Rabbani et al., 2020). The technology of blockchain is also in this trend of fintech organizations. Blockchain technology allows for decentralized transactions without the interference of third-party organizations and government entities. Applications and blockchain technology have been proliferating in the last few years, and more organizations are turning their operations with unconventional and advanced data encryption (Rabbani et al., 2020). And machine learning (ML) and artificial intelligence (Al) are changing fintech organizations by scaling up and redefining the products and services they offer to their clients (Rabbani et al., 2020). Both these technologies are beneficial in decreasing the cost of operations, upsurging the value given to the clients, and spotting fraud. These technologies are easily accessible and affordable and play an increasingly significant role in the evolution of fintech financial organizations (Macchiavello & Siri, 2022).

 

Fin Techs have revolutionized the ecosystem of cross-border payment through enhancing customer service, flexible payment options, widespread global reach, reduced times in transaction, and lower fees. Fintech technology is universally accepted, and everyone accepts and uses this technology (Macchiavello & Siri, 2022). There is an act of regulators that helps ensure robust finances, risk management, governance, and compliance skills that help decrease the risk to the government's safety net and possibly destruction to consumers are between the regulatory criteria and expectations for opening to the banking system FDIC-insured deposits (Macchiavello & Siri, 2022). The quicker approval rate in the banking sector is one of the most defining factors in financial organizations. With the commencement of fintech, the banking operations process has become straightforward (Chishti & Barberis, 2016). People can now quickly request an online digital lender, and the application can be approved in a single day. Customers' information is processed, and they can have admittance to all financial services types of services they need. 

 

Fintech is known for adding efficiency to the process; a fintech organization can be quick and handy simultaneously. Fintech technology allows people to invest for numerous reasons, but the results are specific-improvement in time management and efficiency (Chishti & Barberis, 2016). Robo advisors play a significant role in fintech. Organizations proving these specific questions were asked by the companies and developed a customized investment strategy using particular algorithms. Characteristically, when people start doing an investment, no minimum amount is needed to start an account, and advisors choose low-cost assets. Financial services are more known for giving convenience than spending money (Jakšič & Marinč, 2019). The banking industry started using fintech software because it is the most convenient way of operating their business. The banking industry uses fintech technology to provide a reliable customer experience. Examples of technology that helps enhance the financial business are artificial intelligence, blockchain, lot, machine learning, and numerous other financial technologies that benefit in the long run. Fintech has rationalized most financial activities and business processes by aids suitability at their fingerprints (Jakšič & Marinč, 2019). The insurance and banking business is flourishing in times of uncertainties by offerings progressive and cutting-edge new technologies. Traditional financial institutions are improving their quality by implementing fintech technologies, which increases the productivity and efficiency of the organization. As credit and bank unions observe businesses of fintech as friends on this road rather than sellers, more significant opportunities arise (Jakšič & Marinč, 2019).

 

Numerous banks and organizations have applied fintech technology in their daily operations and earned a large number of revenues (Kagan, 2020). Fintech technology has also managed a segment of services; in this way, various services can be easily offered according to the needs of both users and providers of financial services. A vital aspect of fintech is with every innovation and technology comes with probable cost reduction; it benefits both consumers and businesses (Kagan, 2020). For Example, the Cashplus organization in the UK uses an (API) application program interface, saving almost half of the cost of transactions connected with the banks. Accessibility is easy with fintech technology; the University of Birmingham shows that in 2017, the number of unbanked people in the UK hit 1.23 million, which is an all-time low. A considerable number of people still cannot admit financial help short of fintech (Kagan, 2020).

 

Numerous active areas of fintech innovation revolve and included in the following area are digital cash and cryptocurrency, open banking, it is an idea that supports the posits and blockchain that third-parties should have admittance in the data of bank for creating an application that helps in making financial institutions and third-party providers in the connected network—for Example, tool mint all in one money management (Fadhul & Hamdan, 2020). Smart indentures utilize computer programs (frequently utilize blockchain technology) to automatically perform seller's and buyers' contracts. To avoid anti-money laundering activities and help the financial services organizations in the industry, the technology used frequently all over the globe is Regtech. Robo-advisers like betterment utilize algorithms to automate advice of investment in increasing accessibility and lowering costs (Fadhul & Hamdan, 2020). The four comprehensive categories of fintech users are banks B2B, business clients, small businesses B2C, and consumers. Fintech organizations are prosperous with innovation, and numerous ideas shape the apps. Fintech organizations' examples included Visa, Mastercard, PayPal, Tencent, Ant financial, square, etc. These are a few top fintech companies that advanced their operation with time in the technology (Fadhul & Hamdan, 2020). Fintech companies empower their customers to take charge of their financial lives, leading to more excellent finance knowledge. Some well-known organizations are the lending club, Kabbage, personal capital, and the wealth front.

 

In conclusion, every business or organization can use fintech technology for their products and services and automation and enhancements in their procedures and work. Surrounded fintech technology will rule the industry by 2030; without fintech, it becomes impossible to stay in this competitive environment. Apple card and Facebook pay are fintech technology that has changed the future. When fintech arose in the 21st century, a technology initially applied this technique to the back-end systems for establishing the financial organization. Since then, there has been a change in the oriented services of consumers. Fintech technology comprises different industries such as retail banking, education, non-profit and fundraising, and investment management. Fintech is troublesome if the banking sector innovation takes the backseat. Bankers must frequently look out for the improvements and additional benefits they can deliver to please the customers.

 

Chishti, S., & Barberis, J. (2016). The Fintech book: The financial technology handbook for investors, entrepreneurs and visionaries. John Wiley & Sons. https://books.google.com/books?hl=en&lr=&id=b2fpCgAAQBAJ&oi=fnd&pg=PR8&dq=Fintech+technology+&ots=oCTJO9IjIx&sig=PXnq9pD11HNzNG9mj8vdhxUZNyU  

 

Guild, J. (2017). Fintech and the Future of Finance. Asian Journal of Public Affairs, 17-20. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3021684  

 

 

Jakšič, M., & Marinč, M. (2019). Relationship banking and information technology: The role of artificial intelligence and FinTech. Risk Management, 21(1), 1-18. https://link.springer.com/article/10.1057/s41283-018-0039-y  

 

 

Kagan, J. (2020). Financial technology–fintech. Datum pristupa dokumentu, 13(6). https://www.cpaireland.ie/CPAIreland/media/Education-Training/Syllabus%20Articles/Financial-Technology-%E2%80%93-FintechDefinition.pdf  

 

 

Leong, K., & Sung, A. (2018). FinTech (Financial Technology): what is it and how to use technologies to create business value in fintech way? International Journal of Innovation, Management and Technology, 9(2), 74-78. http://glyndwr.repository.guildhe.ac.uk/id/eprint/17310/  

 

 

Macchiavello, E., & Siri, M. (2022). Sustainable Finance and Fintech: Can Technology Contribute to Achieving Environmental Goals? A Preliminary Assessment of 'Green Fintech'and' Sustainable Digital Finance'. European Company and Financial Law Review, 19(1), 128-174. https://www.degruyter.com/document/doi/10.1515/ecfr-2022-0005/html  

 

 

Rabbani, M. R., Khan, S., & Thalassinos, E. I. (2020). FinTech, blockchain and Islamic finance: an extensive literature review. https://www.um.edu.mt/library/oar/handle/123456789/54860  

 

 

Fadhul, S., & Hamdan, A. (2020, September). The role of" fintech" on banking performance. In European Conference on Innovation and Entrepreneurship 911. Academic Conferences International Limited. https://search.proquest.com/openview/a453c5e968135999bced26522f2c474a/1?pq-origsite=gscholar&cbl=396494